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Banking Market in Romania, 2018

Banking Market in Romania, 2018

After a surge in GDP in 2017, the Romanian economy has decelerated during the first three quarters of 2018. Romania's GDP is expected to slow down to ~4% in 2018 from over 7% recorded in 2017. The key driver of the growth remain private consumption and fixed investments. Private consumption continues to be fuelled by lower taxes, surging wages and falling unemployment. The labour market improved remains strong with unemployment rate persisting below 5%. The consumer price index (CPI) rebounded violently from a negative territory in 2016 to over 4% YoY in the first half of 2018. The highly expansionary fiscal policy pursued by the government, including lowering of VAT and income tax has contributed to imbalances including the C/A deficit and the budget deficit, both widening to over 3% as of 2018.

Total banking assets in Romania increased by 9% YoY in 2017 and they also sustained fast growth in the first three quarters of 2018, hitting a record high of RON 445 billion as of September 2018. Client deposits at banks recorded slightly slower rate of growth to nearly RON 368 billion with household deposits remaining strong. By contrast, outstanding client loans grew faster than in the past and reached RON 257 billion as of Q3 2018. The faster pace of growth in outstanding loans has been accompanied by the falling ratio of non-performing loans. The NPL ratio has more than halved since 2016 and reached 5.7% (EBA ratio) as of June 2018. The sector has also made further progress in containing currency related risks as the share of outstanding loans denominated in foreign currency has been reduced substantially, in particular, in case of corporate and mortgage loans.


Executive Summary
1. Macroeconomic overview
Slide 1: Background: country map, demographic & social statistics, 2017
Slide 2: Consumer markets in Europe and Romania, 2016/2017
Slide 3: GDP, CPI, Exchange rate, 2012-2018F
Slide 4: Consumption expenditure of households, 2012-2017
Slide 5: Wages and unemployment, 2012-2017
Slide 6: Government budget and taxation, 2010-2018F
Slide 7: Foreign trade, current account and FDI, 2012-2017
Slide 8: Stock market performance and capitalization, 2012-2018
Slide 9: Market interest rates, 2012- Nov.2018
Slide 10: Interest rates at banks and NPLs, 2012-2017 H1
2. Banking market
Slide 11: CEE banking markets: growth vs. assets per capita, 2015-2017
Slide 12: CEE benchmarks: Assets/capita, Assets/GDP penetration, 2017
Slide 13: Banking assets evolution, in RON and EUR, up to 2018 Q3
Slide 14: Market concentration, share of top banks, HHI index, 2015-2017
Slide 15: TOP 12 banks in Romania by assets, market share, 2017
3. Market segments
Slide 16: Total client deposits, evolution by segment, 2013-2018 Q3
Slide 17: Household deposits, by currency and by maturity, 2013-2018 Q3
Slide 18: Personal Financial Assets by type, 2016-2018H1
Slide 19: Total client loans, evolution by segment, 2013-2018 Q3
Slide 20: Household loans, evolution by currency and by type, 2013-2018 Q3
Slide 21: Mortgage loans, evolution by currency, 2013-2018 Q3
Slide 22: Corporate loans, evolution by currency and by type, 2013-2018 Q3
Slide 23: Top players, retail banking, by deposits and by loans, 2017
Slide 24: Top players, retail banking, by deposits and by loans, 2017
Slide 25: Payments: # cards, ATMs, POS, card payments, 15Q4-18Q3
4. Profitability & top bank profiles
Slide 26: Top 5 banks profitability tree, 2017, percent of average assets, cost income ratio, ROE
Slide 27: Bank profile: Banca Comercială Română
Slide 28: Bank profile: Banca Transilvania
Slide 29: Bank profile: BRD-Groupe Société Générale
5. Mid-term forecasts
Slide 30: Forecast: Retail deposits and retail loans, 2018-2020
Slide 31: Forecast: Corporate deposits and corporate loans, 2018-2020
Slide 32: Forecast: Banking assets, 2018-2020

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