Domestic market has a high growth potential as cards penetration
Considering the international economic and financial context, 2009 and 2010 were marked by a moderation of the banking activity in Romania, as reflected by the evolution of total banking assets, reveals ENSIGHT report remitted to Nine O'Clock. Non-government loans' (households and non-bank companies) high growth pace until 2008 was replaced by a contraction in 2009 and 2010, in real terms. Thus, the growth pace in real terms of RON loans reached negative territory in May 2009 and continued the trend throughout 2010. Loans in foreign currency had a different dynamic of the growth pace in real terms, and reached negative values in January 2010, regaining its small, positive growth towards the 2nd half of the year.
Deposits have continued their growth, although in 2010 at a slower pace compared to 2009 values. Average interest rates had a descending trend, for both loans and deposits, with a different dynamic depending on the type of currency, after the high levels reached in 2008. The Romanian market has still a high growth potential as cards penetration is concerned, even more considering the descending trend for the number of both valid debit and credits cards observed during the last 2 years. Thus, the number of card valid units and values of ATM withdrawals were lower than their 2008 levels, while cards payment transactions have increased.
Therefore, some of the main short and medium term trends on the Romanian banking system include: repositioning and refocusing of small banks on niche target segments, potential further consolidation of activities, increased competition for "good" customers, increase of cards penetration etc.
On the other hand, although the European economy was affected by the economic recession, in 2009 the total Central and Eastern Europe (CEE) banking assets increased in value by around 2%. Romania was the 4th biggest banking market in CEE in 2009, with total banking assets (EUR 78.1 billion) above the CEE average.
As loans are concerned, their distribution per destination shows differences between CEE countries. While countries like Slovenia show an emphasis on the corporate sector, countries like Romania register a higher level of consumer credit. Also, according to official data, Romania has the highest level of non-performing loans among CEE countries. As deposits are concerned, Romania's total value is below the CEE average. Moreover, for half of the CEE countries the loan-to-deposit ratio is over 1. On the credit cards and non-traditional banking payments market segments, Romania and Bulgaria are at the bottom rank among CEE countries. Thus, Romania's number of credit cards per inhabitant (0.13) is half of Poland's (0.25).
Published on 05.04.2011
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