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Romanian banking market too crowded, analysts say

Analysts consider there are currently too many banks operating on the Romanian market, while no more than 20 institutions would have been enough to satisfy the demand on the market.

Nevertheless, although they consider there are too many banks operating on the Romanian relevant market, analysts say there is nothing like a tight competition among such players, as more than 75 percent of the banking assets are held by the top five banks of the system. Bogdan Baltazar, a consultant in investments, said that, taking into account the current dimensions of the market, a number of 20 banks would be more appropriate. Liviu Voinea, executive manager with the Group of Applied Economics (GEA) has the same opinion, saying the large number of banks on the Romanian market appears to be 'a little bit exaggerated,' taking into account that a country such as Poland, with a double population compared with Romania, has only half the number of banks in the Romanian system. Baltazar estimates in the next two years a slight stagnation in the number of institutions in the baking sector will be seen in Romania, with some of the banks holding such market shares smaller than 1 percent to possibly disappear or with acquisition at very small prices, Adevarul daily reads. With regard to the competition between the banks operating on the local market, analysts seem to have different opinions. The concentration rate in terms of banking assets is liable to dividing the bankers into two categories. On one hand, there are the top credit institutions on the market holding the first positions in terms of assets and fighting over the 'largest banking slice' on the market. On the other hand, we have such small banks with market shares under 1 percent. Liviu Voinea also considers there exists nothing like a tight competition on the market, taking into account the high level of concentration of the banking system. In the opinion of the GEA executive manager, the competition in the banking field is very much depending on the evolution of the interests and also on the evolution of the operational costs which are still quite high. On the other hand, Bogdan Baltazar says the system shows a very close struggle, which is to intensify simultaneously with the access to to the financing source becoming more and more expensive. 'There exists a quite tight competition between the banks on the domestic market at the moment. In the future, I think this competition will intensify, especially while referring to the struggle to access less expensive financial resources. Currently, the Romanian banking system includes 43 credit institutions, among which 29 are Romanian banks, 12 are branches of such banks from the other EU member states and 2 are savings and crediting banks operating on the housing sector. The BNP Paribas Group and the Sygma Bank, which are recorded with the Register of Credit Institutions with the Romanian National Bank (BNR) are also to launch operations on the domestic market this year. Moreover, other 128 banks have notified to the central bank they directly provide services in Romania. Sursa: http://www.actmedia.ro

Tags: banks market institutions competition system there banking analysts romanian bnr

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