The banking market maintained high growth pace during the year 2006. Most rapid development has been experienced in case of retail and corporate lending. At the end of 2006, for the first time in history, the retail loans value has exceeded retail deposits, creating for banks a new challenge. In response to this situation and in reaction to restrictions from BNR, some banks decided to transfer their loans abroad, which proved to be a right move in order to maintain high sales volumes
M&A activity & rising stars
The consolidation of UniCredit subsidiaries has already started and will soon produce a #4 player in terms of assets. The bank has already announced plans of further acquisitions in Romania in 2007/2008; During 2006 some rising stars have changed significantly the top banks league table: Most dynamic bank: Banca Transilvania jumped from #10 (2004) to #5 (3Q 2006) breaking the myth that banks having foreign investor grow faster than local ones. In contrary the CEC bank has continued to loose market share, and has not been able to make use of its unique asset large distribution network. CEC bank has fallen in the top banks rank to #8 (3Q2006)
Banking Infrastructure
Most of banks are heavily investing in physical networks expansion. In total the number of bank outlets has increased in 2006 by several Hundreds, similarly to ATM and POS networks. Many banks have also upgraded their remote channels (internet, call centers, IVR) to improve their service level and reduce costs of transactional operations.
Prospects
The mid-term prospects are very good. Growing wealth of individuals, very low unemployment and good condition of enterprises fueled by record foreign direct investments will convert into additional demand for banking services. The EU membership and higher market transparency is likely to attract to Romania new banking players and financial services specialists, as it happened in other CEE accession countries including Poland.
