Corp­bank blip aside, SEE banking sec­tor re­mains sta­ble

Top 100 See - - Top 100 Banks -

By Doinita Do­lapchieva

Most of the lenders in the SEE TOP 100 banks rank­ing closed 2014 in the black and the over­all re­sult of the sec­tor would have been slightly pos­i­tive if it hadn't been for bank­rupt Bul­gar­ian lender Cor­po­rate Com­mer­cial Bank, Corp­bank, which booked a stag­ger­ing loss of 2.18 bil­lion euro. The com­bined loss of the re­gion's largest 100 banks thus widened to 2.13 bil­lion euro. The same banks re­ported a com­bined loss of 2.05 bil­lion euro in 2013. Croa­tia's Za­gre­backa Banka climbed to the top spot in the rank­ing af­ter be­ing the run­ner-up the pre­vi­ous year. Banca Comer­ciala Ro­mana (BCR) fell to the sec­ond spot, as its as­sets de­clined faster than Za­gre­backa Banka's.

With the ex­cep­tion of Corp­bank, the banking sys­tem in South­east Europe (SEE) man­aged to stay sta­ble, but strug­gled to tackle high non-per­form­ing loan (NPL) ra­tios, weak lend­ing ac­tiv­ity and sub­dued eco­nomic growth. The rank­ing was again dom­i­nated by Ro­ma­nian lenders, which ac­counted for nearly a third of the to­tal as­sets of the largest 100 banks in the re­gion.

As many as 74 of the en­trants in the SEE TOP 100 banks rank­ing ended 2014 in the black, re­port­ing a com­bined net profit of 1.8 bil­lion euro. A to­tal of 35 banks in­cluded in the rank­ing saw their as­sets de­cline in 2014, with Corp­bank record­ing the sharpest drop, by 72.8%, fol­lowed by Ro­ma­nia's Banca Comer­ciala Carpat­ica with a 20% fall.

Corp­bank fell to the 74th spot from the 22nd af­ter its as­sets sank to less than one third. In June 2014, the Bul­gar­ian Na­tional Bank placed the bank un­der spe­cial su­per­vi­sion over risk of in­sol­vency and ap­pointed two con­ser­va­tors af­ter Corp­bank no­ti­fied the cen­tral bank it had run out of liq­uid­ity. Pay­ments and all types of banking op­er­a­tions were sus­pended. In Novem­ber, the cen­tral bank re­voked Corp­bank's li­cence. In April Corp­bank was de­clared in­sol­vent.

Ro­ma­nia had 21 en­tries in the rank­ing with as­sets worth 77.1 bil­lion euro at the end of 2014. Bulgaria, whose population is roughly one third that of Ro­ma­nia, had 18 banks in the chart with to­tal as­sets of 41.8 bil­lion euro.Ser­bia and Slove­nia fol­lowed with 15 lenders each. Ten Croa­t­ian, six Bos­nian and six Al­ba­nian banks made it into the rank­ing. Moldova and Mace­do­nia had five and three rep­re­sen­ta­tives, re­spec­tively, and Mon­tene­gro had just one.

Za­gre­backa Banka, a unit of UniCredit Group, topped the rank­ing de­spite a slight fall in as­sets. It saw its as­sets shrink by 3.8% to 13.4 bil­lion euro while net profit more than dou­bled to 152.2 mil­lion euro mainly as a re­sult of lower im­pair­ment and op­er­at­ing costs and sta­ble in­come.

The Croa­t­ian bank was also the top SEE lender in terms of net profit, fol­lowed by Bulgaria's UniCredit Bul­bank which booked 123.6 mil­lion euro in net earn­ings.

BCR, a unit of Aus­tria's Erste, slid to sec­ond place in the rank­ing af­ter post­ing a 7% drop in as­sets to 13.2 bil­lion euro. The bank switched to a net loss of 586.7 mil­lion euro last year. The loss came mainly on the back of a surge in risk pro­vi­sions, which dou­bled to 4.4 bil­lion lei, or about 1 bil­lion euro, driven by ef­forts to re­duce NPLs, in­clud­ing port­fo­lio sales and write-offs. Fol­low­ing these mea­sures, its NPL ra­tio de­creased to 25.7% at end-2014.

The as­sets of the top 100 banks in the re­gion to­talled 248.3 bil­lion euro at the end of 2014.

Moldova's Banca So­ciala posted the strong­est growth in as­sets among the top 100 SEE banks, nearly four­fold, en­ter­ing the rank­ing di­rectly at num­ber 78. How­ever, Banca So­ciala to­gether with two other Moldovan banks - Banca de Economii and Uni­bank - have been placed un­der spe­cial su­per­vi­sion af­ter about 1 bil­lion U.S. dol­lars went miss­ing from them in Novem­ber 2014. Moldova plans to liq­ui­date the banks by Oc­to­ber 9.

The top 10 fea­tured the same banks as in the pre­vi­ous year, al­beit not all kept the same po­si­tions. The 10 largest banks had as­sets worth a com­bined 90.7 bil­lion euro, or 37% of the to­tal as­sets of the 100 lenders in­cluded in the rank­ing.

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