SEE banks post robust profit growth, Banca Transilvania emerges as leader

By Radomir Ralev

Well capitalised and generally highly liquid, Southeast Europe’s banking sector recorded hefty profits last year, backed by the relatively stable and strong economic growth in the region, as well as lower impairment costs. Despite the accommodative monetary policy of central banks across SEE, the regional lenders expanded their loan portfolios, while at the same time keeping balance positions stable. However, organic growth remained marginal and despite the steady decline in NPL ratios, they remained relatively high, particularly in the Western Balkans.

Romania’s Banca Transilvania replaced Banca Comerciala Romana as the largest bank by assets in SEE in a ranking which otherwise saw little changes at the top. The podium remained reserved for Banca Transilvania, Croatia’s Zagrebacka Banka in second place, and Banca Comerciala Romana in third, with the two Romanian banks swapping their positions. Banca Transilvania increased its total assets by about 25% as a result of the acquisition of Bancpost, a unit of Greece’s Eurobank, whereas Zagrebacka Banka posted a 11% rise. Banca Comerciala Romana’s assets remained almost unchanged.

The combined net profit of the Top 100 SEE banks reached a record-high 4.467 billion euro, well above the 3.524 billion euro in profit of the top 100 lenders in 2017.

Remarkably, only six of the 100 biggest lenders recorded losses last year, compared to 10 in 2017 and 12 in 2016.

BRD – Groupe Societe Generale shined with a profit of 331.5 million euro, up 11.9%. Albania’s Tirana Bank was the biggest loser, ending up 13.2 million euro in the red.  Five lenders swung to profit last year, while only three turned to loss. A total of 72 banks improved their bottom line year-on-year, while 28 saw it worsen. In the 2018 ranking, six banks booked losses worth 34.6 million euro, while 94 made a profit of 4.5 billion euro.

The total assets of SEE’s 100 biggest banks went up 7.2% in 2018 to 294.9 billion euro, with the top five lenders accounting for a quarter of that sum amid ongoing consolidation in the sector. With an impressive 114% asset growth backed by the successful integration of Splitska Banka into its structure, OTP Banka Hrvatska leapt 19 positions to the 15th spot. At the same time United Bulgarian Bank went up to the 14th place from the 19th on the back of a 53% rise in assets after absorbing CIBANK. On the other hand, Addiko Bank d.d. lost six positions to the 35th place as its assets fell 13%.

Romania, the region’s most populated country,  was best represented in the Top 100 ranking with 19 banks, down from 20 last year, as a result of the consolidation of its banking system. Romania was a leader in terms of assets with a 93.1 billion euro aggregate balance sheet of its banks, equal to 31.6% of the region’s total.

There were five new entrants in the ranking, including three from Kosovoand one from Albania and Moldova each. Among the new entrants, the Kosovo subsidiary of Raiffeisen Bank joined the ranking at the highest position, 76th, whereas Albania’s American Bank of Investments posted the largest assetgrowth, of 82.3%.