The high growth rates of banking markets in Central and Eastern Europe were not a sign of an excess, but rather the result of the total lack of genuine retail banking services in the region up until five to ten years ago, said Andreas Treichl, CEO of Erste Group, majority shareholder of the BCR bank at a banking conference organised in London.
"Out of the 14.2 million clients that Erste has in the region, only 314,000 have a mortgage credit, with the average value of the loan amounting to 33,000 euros," says Treichl, pointing to the as yet low level of development of retail banking in the region and of to the low client indebtedness level.
Erste has subsidiaries on seven markets in Central and Eastern Europe: the Czech Republic, Romania, Slovakia, Hungary, Croatia, Serbia and Ukraine (ordered here by size of business)..
However, in terms of the number of mortgage loan contracts, Romania's BCR ranks only fourth, with around 48,000 at the end of 2008, half of the number recorded by Ceska Sporitelna, as well as ranking below Hungary and Slovakia.
As for the average value of a mortgage loan, the BCR ranks fifth, similar to the Hungarian subsidiary, at around 26,000 euros. Ceska Sporitelna ranks first according to this criterion, too, with an average value of 45,000, followed by Ukraine, with 39,000 euros, and Croatia, with 37,000 euros.
Under the circumstances, the value of mortgage loans granted by the BCR amounted to 1.27 billion euros at the end of 2008, compared with 4.35 billion euros for Ceska Sporitelna, 2.19 billion euros - Erste Bank Hungary and 1.66 billion euros at Erste Slovakia.
In all, Ceska Sporitelna has around 5.3 million clients, with the BCR having over 4 million, according to Erste Group data. In terms of retail credit market shares, the bank in the Czech Republic has over 29%, while the BCR has 21.1%, although there is not a big difference in terms of number of branches: 658 and 641 respectively.
Treichl said in underpenetrated markets the dynamics of banking retail is not entirely correlated with the GDP growth rate, suggesting that Erste is not in a very vulnerable position as a result of its massive exposure to Central and Eastern Europe.
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