Views on BG | September 10, 2001, Monday // 00:00

Financial Times

International banks have grabbed more than half the market in the former communist states of central and eastern Europe following a spate of acquisitions, according to a report published on September 10. By the end of last year, the international banks` share of banking assets in the region rose to 53 per cent, up from 41 per cent in 1999 and just 20 per cent in 1997, says the study by Bank Austria, a subsidiary of Germany`s HypoVereinsbank. The increase was largely due to the completion of big privatisations in Poland, Croatia, Romania and Slovakia, where Austria`s Erste Bank bought control of Slovenska Sporitelna. The deals mean that the process of banking privatisation is now largely complete in the core central European states of the Czech Republic, Hungary, Poland, Slovenia and Slovakia. There are still a few acquisitions to be made, notably in Poland, where PKO BP, the largest bank, has still to be privatised. Bank Austria says that south-east Europe is becoming the focus of attention. Planned privatisations include the sale of control of Zagrebacka Banka in Croatia; Nova Kreditna Bank Maribor and Nova Ljubljanska Banka in Slovenia; and Banca Commerciale Romana in Romania. Bank Austria says the competition among international banks includes those which arrived in the region early in the 1990s, such as Bank Austria, and those which invested more recently, such as Belgium`s KBC. KBC is the largest international bank with total assets of Euros 18bn (Dollars 16.2bn), followed by Bank Austria with Euros 15.3bn, Unicredito of Italy with Euros 11.94bn, France`s SocieteGene rale with Euros 11.92bn, and Citigroup of the US with Euros 11.7bn. The report forecasts further rapid growth of 13 per cent a year in banking assets in the region, given the limited role banks now play in the economy. The proportion of banking assets to GDP is just 70 per cent, compared with 260 per cent for the eurozone. The report covers nine countries: Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania, Slovakia, Slovenia and Ukraine.

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