Once a money making machine, which in 2008 made overall profitsof over one billion euros, local banks are now feeling the pinch ofthe prolonged, 26-month economic crisis, which has rendered onefifth of loans granted in the boom period non-performing.
BCR, controlled by Austria's Erste, continues to be the largestbank in the system by assets, but was left behind by severalcompetitors in terms of nine-month profit calculated in line withRomanian accounting standards (RAS). With the share ofnon-performing loans coming to nearly 17% at the end of September,BCR had provision costs that led to a RAS net profit of 74 millionRON, accounting for just a third of the overall earnings reportedfor 2009.
BRD, the local subsidiary of French group Société Générale,remained the second-largest bank in the system in terms of assets,but reported the biggest profit on the market nine months into theyear, with its 474 million-RON earnings leaving the other bankssignificantly behind.
Far behind the top ranker, Austria's Raiffeisen holds on to thenumber 2 position in terms of profit reached in 2009, although itranks 7th in terms of assets, which encourages it to talk aboutsteps to regain the market share lost in the past few years amid aconsolidation strategy.
BCR was also left behind in terms of profit by banks such as RBS,ING and Citi, which tend to do business with major multinationalsand local companies, having less exposure to SMEs and retail (thesegment most affected by the crisis), and which post significantprofits even in these times, after the economy lost 30 billioneuros of GDP in the past two years.
Banca Transilvania, the only Romanian-controlled top-ranking bank,manages to keep up with major competitors and post a significantnine-month profit, having climbed fast from the 8th position byassets at the end of 2009 to 4th on September 30th 2010, amidefforts to continue lending.
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