|  2013-02-15

In a decaying banking reality, Romania stands out on the path to recovery - KPMG Survey

Top management of more than 100 banks present their perspective on the current state of the banking sectors in Austria, the Czech Republic, Hungary, Poland, Romania and Slovakia in a new report prepared by KPMG: The Banking Executive Survey 2012.

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"Countries included in the study share a number of features, but there are also marked differences between them. There may not be many positive signs at present, but there are some improvements we may see in 2013. The worst performing countries in the banking sector expect more of an improvement, according to our results. I think the situation in Romania and Hungary can only improve" says Zdeněk Tůma, Head of Banking at KPMG in the Czech Republic and former Governor of the Czech National Bank.


The overall results of the survey show that the Romanian banking sector is quite stable, with relatively good capital adequacy, despite having experienced losses for two years now. Risks to the banking sector were countered by the efforts of credit institutions, which translated into the consolidation of solvency, provisioning and liquidity levels as well as by measures taken by the National Bank of Romania to address prudential regulation, supervision and adequate management of risks faced by the banking system. “Romanian banks have made advances in the last few years to restructure key areas such as risk management and clean their portfolio of underperforming assets,” says Serban Toader, Senior Partner, KPMG in Romania.


Austria played a major role in the economic transformation of banks in Central and Eastern Europe (CEE), which is why the survey also covers the Austrian banking sector. For Austrian banks, foreign subsidiaries in the region remain an important source of income; despite some losses, they show a positive trend overall. There is a pressure leading towards greater consolidation of the Austrian banking market, and the Austrian government is pushing the banking sector towards early adoption of prudent regulatory measures. The banks will have to prepare restructuring and recovery plans which aim towards greater stability and resolvability.


Cezar Furtuna, Partner, Financial Services, KPMG Romaniaexplains: “Austria’s involvement is substantial in the Central and Eastern Europe region and especially in Romania where Austrian control accounts for approximately 30% of the banking sector and 4 of the top 10 banks in Romania are Austrian-owned. Developments in the Austrian banking market have noticeable effects in Romania and understanding Austria is key for the whole region.”


Regarding the current situation in the banking sector, 66% of the respondents described 2012 as worse than last year and banking executives expect 2013 to be similar. Despite overall expectations, positive development is predicted for the sector in Romania, Austria, the Czech Republic and Hungary; in contrast, Slovakia and Poland expect business conditions to worsen in 2013.


As far as strategic plans are concerned, the surveyed banks are leaning more towards cost-cutting rather than to investment aimed at long-term growth. Measures currently being taken by a majority of banks include steps to increase the efficiency of internal operations and IT solutions to reduce operating expenses. Banks also plan to implement or increase the use of outsourcing and get rid of unprofitable or less key business activities. Government support and debt restructuring are widely considered irrelevant, except in Austria.


According to Serban Toader, “Banks have increasingly focused their attention on cost-cutting and many of them have managed to reduce their cost base to a certain degree”. However, “these banks have been delaying long-term plans and investments and this cannot continue for much longer before they start to experience the adverse effects of overlooking the future of the business.”

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  • Amberly
    17.06.13 ora 01:24

    The aibltiy to think like that shows you're an expert

  • Krystal
    16.06.13 ora 19:06

    Tudor:Cum se procedează een cazul ceend un rtlaizaeor este salarieat din vulumul realizării, şi din pricin obective salariul se primeşte mai mic de salariul minim prevăzut de leje.Şi dacă apar aşa cazuri zilele de sărbători şi cele de odihna lucrate de angazator binevol se platesc dublu, lueend een consederaţie că sa făcut adaus peenă la salariu minim. Dacă se poate indicaţi num Hotăreerei referitor la salarizarea din volumul de realizat

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