The overall results of the survey show that the Romanian banking sector is quite stable, with relatively good capital adequacy, despite having experienced losses for two years now. Risks to the banking sector were countered by the efforts of credit institutions, which translated into the consolidation of solvency, provisioning and liquidity levels as well as by measures taken by the National Bank of Romania to address prudential regulation, supervision and adequate management of risks faced by the banking system. “Romanian banks have made advances in the last few years to restructure key areas such as risk management and clean their portfolio of underperforming assets,” says Serban Toader, Senior Partner, KPMG in Romania.
Austria played a major role in the economic transformation of banks in Central and Eastern Europe (CEE), which is why the survey also covers the Austrian banking sector. For Austrian banks, foreign subsidiaries in the region remain an important source of income; despite some losses, they show a positive trend overall. There is a pressure leading towards greater consolidation of the Austrian banking market, and the Austrian government is pushing the banking sector towards early adoption of prudent regulatory measures. The banks will have to prepare restructuring and recovery plans which aim towards greater stability and resolvability.
Cezar Furtuna, Partner, Financial Services, KPMG Romania
explains: “Austria’s involvement is substantial in the Central and Eastern Europe region and especially in Romania where Austrian control accounts for approximately 30% of the banking sector and 4 of the top 10 banks in Romania are Austrian-owned. Developments in the Austrian banking market have noticeable effects in Romania and understanding Austria is key for the whole region.”
According to Razvan Nan, Senior Manager, Banking Advisory, KPMG in Romania, “Regaining the trust of customers and investors is key for the Romanian banking system. Banks need to learn from past failures and build a new relationship based model for the future.”