UniCredit made it into the top 5, leaving Raiffeisen behind, and ING climbed to no. 8, while Greek-held Alpha Bank and Bancpost continued to slide.
On a lethargic lending market, banks that last year sold more new loans than the amounts clients paid back stood out from the crowd, recording visible rises in terms of market share by assets.
Three of the top-ten banks managed to gain half a percent – Banca Transilvania, UniCredit and ING, while CEC’s market share climbed by 0.4%. The rest of banks eroded their positions as lending collapsed. This was coupled with internal problems in all top-ten banks, with the exception of Raiffeisen.
BCR is not likely to lose its lead very soon, but its market share slipped below 20% again, to 19.3%, after hovering closer to 20% in 2010 and 2011. However, the market share gained in 2010 and 2011 may have taken its toll in terms of the quality of loans sold.
Although BCR has the largest assets, their health is a major problem, with more than a quarter being non-performing. The losses of over 1 billion lei recorded in 2012 speak for themselves, as the cost of risk ate into the bank’s operating profit.
BRD, the no.2 bank by assets, saw its market share down to 13.1% in 2012, losing around one percent in four years of crisis. Initially 2012 was supposed to see an end to the erosion process of 2010-2011, with the bank to take a more offensive approach, but instead the bank ended last year with losses of RON332 million after in the first few years of crisis it had been the most profitable bank.
Banca Transilvania continued to stand out on a rather grey market, with the Cluj-Napoca-based bank managing to boost its market share by assets from year to year without this affecting its profit. In fact the bank’s 2012 profit jumped 40% to RON320 million. During the crisis years Banca Transilvania proved to be the fastest-growing large bank, gaining two percent of market share between 2009 and 2012, from 5.9% to 8%. The bank proved wrong the cliche according to which large players have a certain inertia. Instead it took advantage of the opportunities generated by several of its foreign competitors, which reduced their activity.
BT has over the years built an image for itself as a bank of entrepreneurs, but the vast majority of banks complain specifically about the segment of small and medium-sized enterprises, where non-performing loans are significant.
But the financial results of BT suggest that the bank has managed to attract a certain type of clients and create a relationship with clients that has protected the bank from the explosion of non-performing loans. BT reported a non-performance rate of 11.3%, while the system average is over 18%.
State-run CEC Bank has not managed to perform similarly well, despite great expectations at the beginning of the crisis. The bank’s market share by assets has grown only one percent since 2009, but the market share did manage to exceed 7% as opposed to a 4.3% share in 2007, when foreign banks used to pump massive amounts into the market.
CEC thus ranks 4th on the market, significantly behind BT. A large share of CEC assets is accounted for by government bonds (about one third, according to 2011 data). During the crisis years, CEC officials cited the need for a capital injection from the bank’s sole shareholder – the Romanian state – but despite efforts to do so, the Finance Ministry did not manage to find a solution so that a more significant capital increase would not be treated by the European Commission as state aid.
UniCredit Tiriac Bank traded places with Raiffeisen, climbing to no. 5 and approaching a 7% market share for the first time. The Italian-Austrian bank gained almost one percent of market share during the crisis years, being one of the few banks to boost their annual volume of loans by a double-digit figure, driven up by the corporate segment.
In the first nine months of 2012 UniCredit recorded a 14% rise in its volume of balance sheet loans on a stagnating market. The bank also remained in the profitable half of the ranking, although the cost of risk had become very visible in the first two quarters of last year.
Austrian Raiffeisen has been saying for two years that it is in a position to boost its market share, and that it is even looking at acquisition opportunities. However, 2012 marks a decline in the bank’s market share to 6.5%.
Raiffeisen is one of the banks that put the brakes on expansion even before the crisis hit the market, in a drive for efficiency. Last year’s results confirm Raiffeisen’s main focus – to safeguard its profitability – with Raiffeisen being the most profitable bank in the system last year. On the other hand, the volume of loans originating from Romania declined by 4.3% after the first nine months of 2012. The bank eroded its market share by assets to 6.5%, but it is above the 2009 level.
No.7 is Austria’s Volksbank, which continues its restructuring efforts and although it resumed retail lending, the bank is now more concerned with attracting local resources in order to restore a balance between loans and deposits.
ING Bank climbed to no. 8, gaining more than one percent in market share since 2009. The Dutch bank had a tougher approach at the beginning of the crisis, moving fast to a selection of clients and even to tough restructuring measures and foreclosure sales, but early provisioning allowed ING to continue to boost its balance sheet and become a universal bank. In 2012 ING boosted its market share by half a percentage point, to 4.5%.
The last two positions in the top 10 are filled by Greek-held Alpha Bank and by Bancpost. As was to be expected, the two banks kept slipping, with Alpha losing around two percent against 2009. However, both banks managed to get through the tough times in Greece without letting them weigh on Romanian operations. The shareholders agreed to make capital increases at the central bank’s requests, keeping their solvency ratios above average, and did not rush to request the repayment of financing lines. Most importantly – both banks managed to avoid major deposit withdrawals, with Bancpost becoming a model of stability in terms of resources attracted from clients, even at the cost of burdensome interest rates.
From no. 10 to no. 15 there are no major surprises in the ranking. Garanti Bank has the biggest potential to continue to climb, in part based on its openness to potential acquisitions. UK’s RBS Bank is no longer in the top 15 and will likely slip even further after it sells its retail portfolio. RBS has been replaced at no. 15 by Turkish Credit Europe.
(English version by Daniela Stoican)