By Iliana-Carmen Ionescu, Doinita Dolapchieva
Three quarters of the SEE TOP 100 Banks increased their asset value in 2010 but most of the lenders saw a fall in profits. The top two Southeast European (SEE) banks in terms of assets switched positions last year, as Banca Comerciala Romana (BCR) took the lead, overtaking Slovenia’s Nova Ljubljanska Banka (NLB).
Each of the SEE’s top four banks had assets exceeding 11 billion euro at the end of 2010. The same banks led the ranking in the previous year, with assets above 10 billion euro each.
The net profit of most banks in SEE decreased in 2010 as the financial crisis continued in the region. Only one of the four largest banks registered a rise in its net profit. The banking industry has been hampered by non-performing loans since the economic crisis hit the region and some banks said the level of bad loans was not likely to decrease in the short term.
The highest net profit posted by a bank included in the SEE TOP 100 Banks ranking was 173.5 million euro, while the biggest loss was 183.4 million euro.
The leader in the ranking, BCR, had total assets of 16.3 billion euro at the end of 2010, representing an annual growth of 8.4% which was helped by improved corporate lending and mortgages.
BCR also ended last year with the second highest net profit among the top 100 banks in SEE at 170.8 million euro, down from 262.7 million euro in 2009.
The fall in profit was mainly due to lower net income and high provision expenses, as the continuing difficult market conditions have been heavily impacting BCR’s customers, the bank said.
Slovenia’s largest bank, NLB, dropped to the second position in the SEE TOP 100 Banks ranking after leading it in 2008 and 2009. Its total assets fell 11% to 13.8 billion euro at end-2010. The bank reported the highest net loss in the region at 183 million euro.
NLB said its operations were strongly affected by the lingering economic crisis in Slovenia and in the majority of countries where the group operates, which was reflected in slow growth in lending and increase in the share of bad claims. The latter, in particular, has required a high level of asset impairments. In addition to the impairment of the credit portfolio, the impairment of capital investments and securities received as collateral, and provisions for reorganisation costs also had a significant impact on results.
Croatia’s Zagrebacka Banka (ZABA) ranked third for a second year running, with 13 billion euro in assets at the end of 2010. ZABA posted the highest net profit among the SEE TOP 100 Banks of 173.5 million euro, up from 166.4 million euro in 2009.
Romanian bank BRD, a unit of French banking group Societe Generale, kept its fourth position in the SEE TOP 100 Banks ranking with total assets of 11 billion euro. BRD reported the third highest net profit in 2010 of 116.8 million euro, down from 184.3 million euro in 2009.
Serbia and Bulgaria lead the SEE TOP 100 Banks ranking by the number of entries with 18 each, Slovenia follows with 17 and Romania with 15. In 2009, Romania took the top spot with 21 lenders, but the Romanian banking system has suffered from a continued economic contraction of 7.1% in 2009 and 1.3% in 2010 and from austerity measures implemented last year to keep an IMF-led bailout package on track.
Bosnia has 10 lenders in the ranking, compared to six in 2009. Croatia and Albania had nine and five, respectively, similar to a year earlier. Macedonia and Montenegro have three representatives each, unchanged from last year. Moldova had a new entry, Banca Comerciala Victoriabank, which placed 94th. The other Moldovan bank included in the ranking, Banca Comerciala Moldova Agroindbank, jumped to the 87th spot from the 100th a year earlier.
Garantibank International N.V. Branch Romania jumped 31 places to the 44th spot as its assets climbed to 1.426 billion euro in 2010. Its loss, however, widened to 29.6 million euro.
Bulgarian Development Bank was the second-best advancer with a jump of 21 places to the 78th spot. Its assets rose by half to 704 million euro last year and its profit climbed to 14.7 million from 8.9 million. The state holds a 99.97% stake in the bank.
Bosnia’s Hypo Alpe-Adria-Bank d.d. Mostar slid 11 places in the ranking to no. 63. Its assets fell 17% while its net loss widened to 70.9 million euro from 9.8 million in 2009.
The number of active banks in SEE at the end of 2010 was 238, flat compared to 2009.