CEE Banking Sector Report - 2015

  • ID: 3287156
  • Report
  • Region: Central Europe, Eastern Europe
  • 79 Pages
  • Emerging Markets Direct
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A timely flow of thought-provoking reports discussing the major issues of each economy
The Turkey Quarterly Report is an essential country guide providing a detailed review of the economic and political developments during the quarter, as well as a discussion of their overall implications.

Written by the well-known Istanbul-based team of Murat Ucer and Atilla Yesilada, the report offers a views from “on the ground” on the month’s developments as well as perspectives for the future, including year-end macro forecasts.

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Executive summary
- Overview
- Macroeconomic developments
- EBRD sees Eurozone recovery boosting growth in Central Europe and the Baltics
- Major trends and outlook for the CEE banking sector
- EBRD tries to kick-start bank lending as CEE convergence falters
- Outflow of bank liquidity continues
- S&P sees foreign banks pulling out of Russia and Ukraine
- Central Europe offers some relief as RBI net profit halves in first quarter
- RBI draws in its horns in CEE
- Erste rules out acquisitions as it reports record loss
- Baltic States
- Moody's: Outlook turns negative for Baltic banking system

- Estonian financial system stable, but risks persist says central bank
- Estonian loan quality aids financial stability, says central bank
- Banking sector net profit shrinks 26% in 2014
- Banking sector net profit soars 2.4 times in Q1
- Steady growth in the loan and lease portfolio continues in April

- Latvian financial market watchdog sets priorities until 2017
- Banking sector net profit rises 26.5% in 2014
- Net profit keeps on growing in January-April, lending keeps on shrinking

- IMF says banking system strengthening
- Banking sector profit drops 24% in 2014
- Banking sector profit grows 10% y/y in Q1
- Banks to seek alternatives to improve profitability
- Lending remains sluggish, loan quality worsens slightly in Q1
- Deposits fall after hitting record high at end-2014
- Capitalisation improves further
- Geopolitical tensions overshadow low interest rate concerns - survey

- Recent developments and trends
- Banking sector turbulence
- Concerns remain...
- …but are to be addressed
- Greek woes
- Bulgarian banking sector profit rises 22% y/y in January-April
- Deposits grow moderately
- Lending plummets after Corpbank’s collapse
- Problem loans worryingly high
- M&A activity
- Bulgaria’s Doverie United Holding to buy local ?okuda Bank

Czech Republic
- Recent developments and trends
- Czech banking profit recovers in 2014
- Czech loan growth accelerates to six-month high in April
- Czech corporate loans seen growing 5%-6% in 2015
- Czech banks continued to ease credit standards in Q1
- Czech mortgage rates bouncing back from record lows
- New Czech mortgage loans at two-year high in May
- Czech financial sector's resilience continues growth - central bank
- S&P maintains low to moderate risk rating on Czech banking sector
- M&A activity
- Austrian banks reportedly facing off to buy Citi’s Czech retail business
- Alfa and BNP Paribas reportedly racing for Zuno Bank
- UniCredit Czech Republic and Slovakia acquires factoring provider Transfinance
- General Electric plans to sell Czech banking arm

- Recent developments and trends
- Banking sector reports record high loss in 2014
- Hungary plans bank tax reliefs to boost lending
- Hungarian central bank warns of loans risk, while bank lending continues fall
- Hungary’s central bank puts up €1.1bn for conversion of forex retail loans
- Hungary to stir up market with new ratio requirement on mortgage portfolios
- Banking association estimates Hungary's forex loan moves cost lenders HUF1trn
- UniCredit announces large scale branch closures in Hungary
- Raiffeisen to scale down retail banking operations in Hungary
- Austria’s Oberbank eyes expansion on Hungarian market
- M&A activity
- State boosts ownership in banking sector
- Hungarian central bank approves state acquisition of Budapest Bank
- Hungarian state reportedly set to add Sberbank to bank collection
- Hungary's appetite for banks not yet sated, suggests central banker
- Hungary reportedly set to pay €51mn for Erste stake
- Erste reportedly closing in on acquisition of Citi’s Hungarian retail portfolio

- Recent developments and trends
- Polish banking profit hits 5-year high in 2014
- Banking sector profit grows further in Q1 but uncertain outlook for the year remains
- Polish bank profit set to drop, but financial system stable, says NBP
- Banks grow loans and deposits in Q1
- Polish banks foresee further easing of credit criteria
- Polish banks warn raised stability fund charges will hit credit
- Polish banks table new mortgage relief proposals as pressure rises
- Recovery on Poland’s mortgage market fails to last
- M&A activity
- Polish bank sales unlikely to boost consolidation or profitability, says Fitch
- PZU buys Alior stake as ""first step"" in consolidation of the banking sector
- PZU reportedly in due diligence on RBI's Polish unit
- Chinese investment fund reportedly eyeing Raiffeisen Polbank
- General Electric looking for buyers of Bank BPH
- Poland’s Bank Pocztowy to list in Warsaw by October, says minister
- Poland's FM Bank PBP sold to PE fund AnaCap

- Recent developments and trends
- Banking system reports robust €187mn profits in Q1, after massive losses in 2014
- Bank loans in Romania 3.8% down y/y at end-April, currency substitution loses ground
- Romania’s bank deposit base keeps expanding, by 6.3% y/y at end-April
- New bank loans issued in Romania up 5.7%y/y, to €3.45bn in January-April
- Bad loans remain constant in Romania in Q1
- M&A activity
- Banca Transilvania acquires Volksbank Romania
- UniCredit Bank Austria buys out Tiriac's 45% stake in Romanian unit
- Banca Transilvania, OTB Bank reportedly compete to buy Piraeus’ Romanian division
- Nextebank makes third merger offer to Romanian Banca Carpatica.

- Recent developments and trends
- Russia’s key interest rate seen falling to at least 10% by end-2015
- S&P: Government support critical for Russian banking sector, bad loans to soar
- Russian banks face widespread losses, says Moody's
- Russia’s central bank expects rise in overdue loans and unprofitable banks in 2015
- Russia abandons “bad debt” bank idea
- Central bank extends anti-crisis measures, exchange rate pegs
- Most eligible Russian banks apply for OFZ recapitalisation scheme
- One fifth of Russian banks under central bank supervision
- Central bank says banks fit for worst-case $40/barrel oil scenario
- Banks ask government for extra mortgage subsidies
- Russians losing trust in banks - survey
- Banks see record surge in loan fraud
- Major players
- Sberbank's Q1 profit drops 58% y/y, but above expectations
- VTB Bank reports RUB18.3bn losses in Q1
- Charity spending pushes Russia's VTB Bank into first-quarter loss
- Gazprombank became lossmaking in 2014
- Gazprombank to request capital support, may issue CNY bonds

- Recent developments and trends
- Slovak banks see profit rise 23% in January-April
- Deposits and loans rise in April, NPL ratio declines
- Slovak banking sector remains resilient, central bank reports
- C-bank imposes extra capital buffers on four systemically important banks
- M&A activity
- Trio reportedly eyeing Sberbank’s Slovak unit
- Alfa and BNP Paribas reportedly racing for Zuno Bank

- Loss of operating Ukrainian banks up 8-fold y/y in Q1
- Non-performing loans reach 25% of total in May
- Ukrainian bank insolvencies cost 9% of GDP in 2014-15
- Ukraine's fourth largest bank collapses
- Government support for Ukrainian banks dwindling - S&P
- Moody's sees increased insolvency risk in Ukrainian banking sector
- ICU estimates $11bn needed to recapitalise Ukrainian banking system
- State-owned Ukreximbank agrees $1.5bn debt restructuring with bondholders
- State-owned Oschadbank agrees $1.3bn debt restructuring deal
- EBRD insists on bank reforms

List of Tables:
Table 1 GDP growth forecasts, %, y/y
Table 2 Estonia: Banking sector earnings performance
Table 3 Latvia: Banking sector earnings performance
Table 4 Lithuania: Banking sector earnings performance
Table 5 Bulgaria: Banking sector earnings performance
Table 6 Czech Republic: Banking sector earnings performance
Table 7 Romania: Stock of bank loans, RONbn
Table 8 Romania: Stock of bank deposits, RONbn
Table 9 Romania: Bad loans
Table 10 Slovakia: Banking sector earnings performance

List of Figures:
Figure 1 Estonia: Quarterly loan losses and net profit of the banking sector
Figure 2 Estonia: Monthly change and annual growth in loans and leases extended to domestic non-financial companies and households by banks operating in Estonia
Figure 8 Bulgaria: Lending portfolio, outstanding amounts (BGN bn, rh axis) and y/y change
Figure 9 Hungary: Banking sector earnings
Figure 10 Romania: Banking sector net profit, quarterly, €mn
Figure 11 Romania: Stock of credit by debtor
Figure 12 Romania: Non-government bank deposits
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