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Still growing: Romania's BCR overtakes Slovenia's NLB as Southeastern Europe's biggest bank.

Three quarters of the SEE TOP 100 Banks increased their asset value in 2010, but most of the lenders saw a fall in profits. The top two Southeast European (SEE) banks in terms of assets switched positions last year, as Banca Comerciala Romana (BCR) took the lead, overtaking Slovenia's Nova Ljubljanska Banka (NLB).

Each of the SEE's top four banks had assets of more than 11 billion euro at the end of 2010. The same banks led the ranking in the previous year, with assets of more than 10 billion euro each.

The net profit of most banks in SEE decreased in 2010 as the financial crisis continued in the region. Only one of the four largest banks registered a rise in its net profit. The banking industry has been hampered by nonperforming loans since the economic crisis hit the region and some banks said the level of bad loans was not likely to decrease in the short term.

The highest net profit posted by a bank included in the SEE TOP 100 Banks ranking was 173.5 million euro, while the biggest loss was 183.4 million euro.

The leader in the ranking, BCR, had total assets of 16.3 billion euro at the end of 2010, representing an annual growth of 8.4 per cent, which was helped by improved corporate lending and mortgages.

BCR ended last year with the second highest net profit among the top 100 banks in SEE at 170.8 mil Lion euro, down from 262.7 million euro in 2009. The fall in profit was mainly because of lower net income and high provision expenses, as the continuing difficult market conditions have been heavily impacting BCR's customers, the bank said.

Slovenia's largest bank, NLB, dropped to the second position in the SEE TOP 100 Banks ranking after leading it in 2008 and 2009. Its total assets fell 11 per cent to 13.8 billion euro at the end of 2010. The bank reported the highest net loss in the region at 183 million euro.

NLB said its operations were strongly affected by the lingering economic crisis in Slovenia and in most countries where the group operates, which was reflected in slow growth in lending and increase in the share of bad claims. The latter, in particular, has required a high level of asset impairments. In addition to the impairment of the credit portfolio, the impairment of capital investments and securities received as collateral, and provisions for reorganisation costs also had a significant impact on results.

Croatia's Zagrebacka Banka (ZABA) ranked third for a second year running, with 13 billion euro in assets at the end of 2010. ZABA posted the highest net profit among the SEE TOP 100 Banks of 173.5 million euro, up from 166.4 million euro in 2009.

Romanian bank BRD, a unit of French banking group Societe Generale, kept its fourth position in the SEE TOP 100 Banks ranking with total assets of 11 billion euro. BRD reported the third highest net profit in 2010 of 116.8 million euro, down from 184.3 million euro in 2009.

Serbia and Bulgaria lead the SEE TOP 100 Banks ranking by the number of entries with 18 each, Slovenia follows with 17 and Romania with 15. In 2009, Romania took the top spot with 21 lenders, but the Romanian banking system has suffered from a continued economic contraction of 7.1 per cent in 2009 and 1.3 per cent in 2010 and from austerity measures implemented last year to keep an IMFled bailout package on track.

Bosnia has 10 lenders in the ranking, compared to six in 2009. Croatia and Albania had nine and five, respectively, same as a year earlier. Macedonia and Montenegro have three representatives each, unchanged from last year.

Moldova had a new entry, Banca Comerciala Victoriabank, which placed 94th. The other Moldovan bank included in the ranking, Banca Comerciala Moldova Agroindbank, jumped to the 87th spot from the 100th a year earlier.

Garantibank International N.V. Branch Romania jumped 31 places to 44th as its assets climbed to 1.43 billion euro in 2010. Its loss, however, widened to 29.6 million euro.

Bulgarian Development Bank made the second biggest jump, rising 21 places to 78th. Its assets rose by half to 704 million euro in 2010 and its profit climbed to 14.7 million euro from 8.9 million euro. The Bulgarian state holds a 99.97 per cent stake in the bank.

Bosnia's Hypo Alpe-Adria-Bank d.d. Mostar slid 11 places in the ranking to 63rd as its declined by 17 per cent and its net loss widened to 70.9 million euro from 9.8 million in 2009.

The number of active banks in SEE at the end of 2010 was 238, flat compared to 2009.

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Tough lessons for BCR

Romania's BCR learned some valuable lessons by going through the financial crisis and managed to keep its leading position on the local market by focusing on developing its human resource and meeting the needs of its clients, its CEO, Dominic Bruynseels, said.

Bruynseels was brought to the helm of BCR in July 2008 with the task of managing its growth, which had been strong in the previous years. But the financial crisis hit the country hard that year, so he also had to steer one of Romania's top banks through the financial turmoil.

And he did a good job. In 2010, BCR, majority owned by Austria's Erste, rose to the top spot in the SEE TOP 100 Banks ranking after being the runner-up in 2009.

"2010 was an especially difficult year. The economy was subjected to a significant austerity programme. The most difficult challenge was finding solutions for supporting clients in distress. It is in our very interest to support them, negotiate appropriate terms, restructure their loans," Bruynseels told SeeNews.

He believes the main strength of the bank lies with its employees.

"Customers don't bank with BCR, they bank with BCR's people. So if we have the best people, if they are well motivated, well trained, well led and given the tools to do the job, they will serve our customers brilliantly, and if they do that then we will be very profitable, enabling us to share some of the rewards with them, some with our shareholders and some with the communities in which we live and work.

"To be successful we need to communicate, to collaborate, to fill gaps left by others, to motivate, to rescue, to encourage, to be skilled and ensure our own skills and knowledge, to take collective responsibility for the outcome, successful or not, and not wait for someone else to make the first move."

In order to achieve that, BCR made sure its organisational culture is well articulated by defining relevant mission, vision and values and that it is well promoted through extensive internal dialogue as well as intensive top-down and bottom-up feedback.

"Additionally we implemented performance monitoring and employee recognition schemes for identifying and acknowledging the best-performing employees together with a development and a talent management programme."

Bruynseels believes the crisis has taught bankers to be more sensitive to clients' needs.

"We need to know our customers better, to serve them better, to offer them simple and accessible products meeting their needs and possibilities, more suitable savings options and, also, affordable financing solutions. Banks have a responsibility to try to improve the way that customers trust them," he said.

There are also a number of lessons that have been learnt, primarily about handling unsecured lending.

"We've designed new risk standards and systems that we think would allow us to better pick and choose the risks that we want to take. Generally, the crisis taught us that you need to have a very clear strategy of what you're trying to do, the risks you're prepared to take, and stick to it."

He said BCR is trying to support customers who try to repay their debt but has a zero tolerance policy towards delinquent borrowers.

BCR is also making efforts to promote environmental sustainability. In 2009 it launched ECO BCR - a project meant to increase awareness of environmental issues and more efficient use of electricity, fuel and water. BCR is the only Romanian financial institution that has joined the United Nation Environmental Programme Finance Initiative.

Besides the parent bank, the BCR Group also includes BCR Banca Pentru Locuinte, BCR Securities, BCR Chisinau, BCR Asset Management, Anglo-Romanian Bank Limited, BCR Leasing IFN, BCR Pensii and mobile banking business good.bee Service RO.

"We are the leading savings bank in the country, the leading corporate bank, the leading mortgage bank and a leader in the SME market as well."

Reprinted from SEE TOP 100, the only ranking of the largest nonfinancial companies, banks and insurers in Southeastern Europe. It features 132 pages of industry analyses and forecasts, expert opinions and interviews with the region's leading executives and business people. SEE TOP 100 is published by SeeNews, a business information provider for Southeast Europe, in strategic partnership with the global strategic management consulting firm A.T. Kearney and in exclusive content partnership with Euromonitor International. For more information please visit http://top100.seenews. com or request a hard copy at consulting@seenews.com.
SEE TOP 10
2010  2009  Company name      Country      Total     Y/Y           Net
                                         assets,  change  profit/loss,
                                            2010                  2010
                                        (million    (per      (million
                                           euro)   cent)         euro)

1     2     Banca Comerciaia  Romania     16 324     8.4         170.8
            Romana SA
2     1     Nova Ljubljanska  Slovenia    13 830  -10.83        -183.4
            Banka d.d.
3     3     Zagrebacka Banka  Croatia     13 020     3.6         173.5
            d.d.
4     4     BRD - Groupe      Romania     11 084    2.37         116.8
            Societe Generaie
            SA
5     5     Privredna Banka   Croatia       9120    4.39         116.4
            Zagreb d.d.
6     6     Erste &           Croatia       6839     3.2          82.6
            Steiermarkische
            Bank d.d.
7     7     UniCredit         Bulgaria      5765   -2.11          81.2
            Buibank AD
8     8     Raiffeisenbank    Croatia       5473    2.34          50.9
            Austria d.d.
9     9     Hypo              Croatia       5240    0.52          30.8
            Aipe-Adria-Bank
            d.d.
10    15    Raiffeisen Bank   Romania       5086    9.64          81.3
            SA

2010  2009  Company name          Net
                              profit/
                                loss,
                                 2009

1     2     Banca Comerciaia    262.7
            Romana SA
2     1     Nova Ljubljanska    -23.6
            Banka d.d.
3     3     Zagrebacka Banka    166.4
            d.d.
4     4     BRD - Groupe        184.3
            Societe Generaie
            SA
5     5     Privredna Banka     126.9
            Zagreb d.d.
6     6     Erste &              83.1
            Steiermarkische
            Bank d.d.
7     7     UniCredit            99.6
            Buibank AD
8     8     Raiffeisenbank       55.8
            Austria d.d.
9     9     Hypo                 16.2
            Aipe-Adria-Bank
            d.d.
10    15    Raiffeisen Bank      73.6
            SA
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Title Annotation:TALKING BUSINESS
Author:Ionescu, Iliana-Carmen; Dolapchieva, Doinita
Publication:The Sofia Echo (Sofia, Bulgaria)
Article Type:Reprint
Geographic Code:4EXRO
Date:Oct 14, 2011
Words:1787
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