At the middle of this year, the ten banks – BCR, BRD, Banca Transilvania, Raiffeisen, UniCredit, Volksbank, CEC Bank, Alpha Bank, Bancpost and ING – registered cumulated profit worth just 380 million lei, according to Romanian accounting standards (RAS). Last year, the same banks generated profit of RON573 million.
BRD, controlled by French Societe Generale for almost 12 years, had a 74% share of the total profit, with RON282 million. BRD remains the most profitable bank, making the best use of its assets.
BCR, the leader by assets, in mid-2011 had profit of RON163 million in RAS. The cumulated result of the ten largest banks is hammered by Volksbank, which posted a loss of RON306 million in the first half.
Banca Transilvania, controlled by a group of Romanian entrepreneurs, managed to climb to the third position in terms of assets, beating Raiffeisen and CEC Bank, and generate a RON66 million gain.
In the top ten, besides Volksbank, Bancpost and Alpha Bank were also in the red in terms of financial results, with losses of RON45 million and RON67 million, respectively.
CEC, the only top ten bank held by the Romanian state, reported a RON10 million gain in mid-year.
In terms of balance sheet net assets, the banking system posted a 1% decline to RON338.9 billion (EUR80.7 billion).
The ten largest banks lost little ground, with their total assets sliding from RON267 billion to RON263 billion.
On a falling market, the battle for market share meant, in the first half of the year, clients transferring from one bank to another and visible advances for the lending institutions that afforded to take on new risks, while others deliberately ceded assets for reasons related to provisions or capitalization.
BCR and BRD managed to widen their market shares from late 2010, particularly on corporate operations. BCR continues the market share rebuilding process it started in 2009. The bank thus reached an even larger market share than in 2008, gaining almost one percentage point in six months. BRD, which preferred a more cautious approach, slightly overshot its 2009 share.
However, the most aggressive increase amid the crisis comes from Banca Transilvania, which reached the third position for the first time, with 6.7% in banking assets. The bank is among the few players that had above-market-average lending increases and thus managed to overtake Raiffeisen.
However, a lot of banks transfer assets either abroad or from abroad back into the local balance sheets and this can generate sudden market share fluctuations that are not necessarily explained by rising or falling turnover. Still, data can quite well suggest the trend of a player’s turnover over a period and what kind of strategy it embraces.
(English version by Catalina Apostoiu; Editing by Radu Bostan)