SEE bank­ing sec­tor's losses widen sharply on Slove­nian woes

Top 100 See - - Top 100 Banks -

Most of the lenders in the SEE TOP 100 banks rank­ing closed 2013 in the black but the over­all loss of the sec­tor widened to 2.18 bil­lion euro, due to the heavy losses booked by Slove­nian banks. With the ex­cep­tion of Slove­nia, the bank­ing sys­tem in South­east Europe (SEE), how­ever, man­aged to stay sta­ble, al­though con­tin­u­ing to strug­gle with high non-per­form­ing loan (NPL) ra­tios, weak lend­ing growth and sub­dued eco­nomic growth. The rank­ing was dom­i­nated by Ro­ma­nian lenders, which ac­counted for nearly a quar­ter of the to­tal as­sets of the banks in the re­gion. many as 70 of the en­trants in the SEE TOP 100 banks rank­ing re­ported a profit in 2013 but the over­all re­sult of the biggest banks in the re­gion was a neg­a­tive 2.18 bil­lion euro, due to the heavy losses re­ported by Slove­nian banks. The banks in the 2013 edi­tion re­ported a com­bined loss of 2.1 mil­lion euro in 2012, ac­cord­ing to re­vised data.

In late 2013 Slove­nia re­cap­i­talised and fully na­tion­alised three banks: Nova Ljubl­jan­ska Banka (NLB), Nova Kred­itna Banka Mari­bor (NKBM) and Abanka, in­ject­ing a to­tal of 3.012 bil­lion euro in them as part of a 4.8 bil­lion euro res­cue plan for the coun­try's bank­ing sec­tor. Slove­nia's banks ended 2013 with a com­bined pre-tax loss of 3.2 bil­lion euro. As part of the pro­gramme, NLB and NKBM trans­ferred a large por­tion of their non-per­form­ing loans to a gov­ern­ment-owned "bad bank".

A to­tal of 38 banks in­cluded in the rank­ing saw their as­sets de­cline in 2013, with Ser­bia's Hypo Alpe-Adria-Bank AD, a unit of na­tion­alised Aus­trian bank­ing group Hypo-Alpe Adria, record­ing the sharpest drop, by 26%. Not sur­pris­ingly, al­most all Slove­nian banks in­cluded in the TOP 100 banks saw their as­sets shrink last year and slid lower in the rank­ing.

De­spite a 10% drop in as­sets to 14.16 bil­lion euro, Ro­ma­nia's Banca Comer­ciala Ro­mana (BCR), a unit of Aus­tria's Erste, topped the rank­ing for the fourth year in a row. The bank posted a net profit of 74.8 mil­lion euro in 2013 af­ter record­ing a hefty loss a year ear­lier, when its busi­ness was hit by the ad­verse eco­nomic en­vi­ron­ment, high pro­vi­sion­ing re­quire­ments that prompted an in­crease in risk cov­er­age costs and a rise in NPLs cov­er­age ra­tio.

The run­ner-up, Croa­tia's Za­gre­backa Banka, came breath­ing down BCR's neck af­ter achiev­ing a nearly 3.0% rise in as­sets. The dif­fer­ence be­tween the top two banks' as­set value was re­duced con­sid­er­ably – to 216 mil­lion euro from 2.125 bil­lion euro. Za­gre­backa Banka, a unit of UniCredit Bank Aus­tria, boosted its as­sets to 13.95 bil­lion euro at end-2013 as its net profit halved to 60.9 mil­lion euro. Ro­ma­nia's BRD – Groupe So­ci­ete Gen­erale ranked third, its as­sets edg­ing down 1.8% while its net loss widened to 86 mil­lion euro. The bank con­sol­i­dated its level of NPLs cov­er­age with pro­vi­sions to 68.9% from 51.9% at end-2012, an ef­fort trans­lat­ing into a high cost of risk on SMEs port­fo­lio.

The as­sets of the top 100 banks in the re­gion to­talled 246.9 bil­l­lion euro at the end of 2013. The to­tal as­sets of the en­trants in the 2012 rank­ing was 235.8 bil­lion euro.

Moldova's Moldind­con­bank posted the strong­est growth in as­sets among the top 100 SEE banks, of nearly 50%, climb­ing to the 86th po­si­tion. The top ten banks had as­sets worth a com­bined 90.3 bil­lion euro, or 37% of the to­tal as­sets of the 100 lenders in­cluded in the rank­ing. Six of last year's top 10 banks re­tained their po­si­tions in the rank­ing, a few switched places and Ro­ma­nia's CEC Bank ex­ited the top 10 af­ter fall­ing two spots to the 11th place. An­other Ro­ma­nian lender, Raif­feisen Bank, en­tered the top 10 by climb­ing up one spot from the 11th place.

Ro­ma­nia, the largest coun­try in SEE with a pop­u­la­tion of some 20.1 mil­lion peo­ple, dom­i­nated the rank­ing, with 22 en­tries. Bul­garia, whose pop­u­la­tion is roughly one third that of Ro­ma­nia, had 18 banks in the chart, fol­lowed by Ser­bia and Slove­nia with 15 lenders each. Ten Croa­t­ian, seven Bos­nian and six Al­ba­nian banks made it into the rank­ing. Mace­do­nia and Moldova had three rep­re­sen­ta­tives each, and Mon­tene­gro had just one.

Look­ing at the Bul­gar­ian en­trants in the rank­ing, the 2013 fi­nan­cial results of the coun­try's fourth-biggest lender, Cor­po­rate Com­mer­cial Bank, still show lit­tle sign that in June 2014 it would be placed un­der spe­cial su­per­vi­sion over risk of in­sol­vency af­ter run­ning out of liq­uid­ity. The lender recorded a 19.6% an­nual rise in as­sets to 3.45 bil­lion euro at the end of 2013 and a hefty 26% in­crease in profit dur­ing the year.

The largest net profit among SEE banks in 2013, of 107.7 mil­lion euro, was again posted by a Ro­ma­nia-based bank, the lo­cal unit of Aus­tria's Raif­feisen. Its as­sets rose by 12.2% to 6.0 bil­lion euro. It comes as lit­tle sur­prise that the biggest loser was a Slove­nian bank - NLB, whose net loss widened five times from a year ear­lier to 1.54 bil­lion euro. Slove­nia aside, the bank­ing sys­tem in SEE was rather sta­ble in 2013, al­though it con­tin­ued to strug­gle with high NPL ra­tios, weak lendAs

ing growth and sub­dued eco­nomic growth. For ex­am­ple, the share of NPLs in the credit port­fo­lio of Ro­ma­nian banks rose to 21.9% at the end of 2013 while in Bul­garia it climbed to 16.9% and in Croa­tia it grew to 15.4%.

The top three banks in terms of loans value at the end of 2013 were Za­gre­backa Banka, BCR and BRD - Groupe So­ci­ete Gen­erale, with loan port­fo­lios of 9.5 bil­lion euro, 8.4 bil­lion euro an d 6.2 bil­lion euro, re­spec­tively. Among them, only Za­gre­backa Banka ex­pe­ri­enced an in­crease in loans, by a mea­ger 1.2%, while the other two lenders' credit port­fo­lios shrank by 15.4% and 11.8%, re­spec­tively. The same three banks topped the de­posit rank­ing, with BCR grab­bing the top spot, with 10.8 bil­lion euro in de­posits at the end of 2013, down 12.4% on the year. Za­gre­backa Banka and BRD fol­lowed, with 9.9 bil­lion euro and 8.4 bil­lion, re­spec­tively.

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