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April 23, 2021

East Europe’s banks to outperform Western peers, UniCredit Says

Central and Eastern Europe’s banking industry continues to show good profitability and will outperform its western European peers in the years to come, analysts at Eastern Europe’s biggest western-owned bank by assets, UniCredit SpA (UCG), said in a study by its CEE Strategic Analysis Department said, Bloomberg informs, quoted by Mediafax.  “With an average return on equity expected at 10.9 percent in the years 2012–2015, the region will reveal an attractive and more sustainable double-digit profitability ratio than Western Europe,” UniCredit analysts inform. Regulators and policy makers are trying to shield growth in Eastern Europe against contagion from the euro area’s debt crisis. New capital and liquidity requirements for the western lenders controlling three-quarters of Eastern Europe’s banking system have curbed credit needed to fund the region’s companies and households. Total banking assets in the region have grown even in the aftermath of the collapse of Lehman Brothers Holding Inc. and Europe’s debt crisis, though at a slower pace, according to the study, released today in Vienna. Total banking assets grew an average 7.3 percent per year to 2.9 trillion euros between Sept. 2008 and Sept. 2012, the study says. “The slower growth in total assets comes on the back of a more prudent stance, asset quality deterioration and limited investment opportunities,” Aurelio Maccario, head of CEE Strategic Analysis for UniCredit, said in a statement. “Additionally the loans-to-deposits ratio is playing a more important role, stressing the need to improve the funding structure of the balance sheet.”

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