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The Banker’s Top 100 CEE Banks ranking for 2020 shows the region’s lenders are in good financial health, with many gains in capitalisation and total assets, which should act as a buffer to headwinds from Covid-19. 

Central and eastern European (CEE) economies fared relatively well in 2019, despite the headwinds being experienced in some of their largest trading partners.

Most of the region’s biggest markets, including Poland and Hungary, achieved gross domestic product growth above 4%, while industrial production was strong throughout. In light of these conditions, it is little wonder that regional banks achieved a strong set of results over the period. As The Banker’s Top 100 CEE Banks ranking shows, nearly all of the biggest lenders secured commendable increases in their capitalisation, assets and profitability. Though there are exceptions to this trend, the overall picture is positive.  

Regional stars

In particular, Polish lenders enjoyed a robust performance over the 2019 review period, accounting for six of the top 10 banks by Tier 1 capital in the main ranking. PKO Bank Polski easily secured the top spot in the regional table with Tier 1 capital of $9.7bn, an increase of 3.4% on the previous year. This was accompanied by a 6.2% rise in total assets, as well as a 12.3% increase in pre-tax profits. Santander Bank Polska and Bank Pekao also achieved positions in the top five in the main ranking, coming in third and fourth place, respectively.  

Out of the top five banks in Poland by Tier 1 capital, the best-performing accolade goes to PKO Bank Polski, with a score of 7.75. This was based on the lender’s market-beating performance in terms of its profitability, operational efficiency, asset quality, return on risk, leverage and soundness indicators. Meanwhile, Bank Gospodarstwa Krajowego achieved second position in the performance ranking with a score of 7.31, bolstered by a strong showing in the growth and liquidity stakes, where the lender scored top spot. Bank Pekao, which achieved third place, attained a best-performing score of 7.14. 

Elsewhere, Czech Republic banks also fared well in this year’s edition. In total, four lenders from the country made it into the top 20 banks by Tier 1 capital, while all 13 Czech institutions featured in the ranking registered increases to their Tier 1 capital position. Ceska Sporitelna, the country’s largest bank by Tier 1 capital, saw its capital positions expand by 10.9% in 2019, as pre-tax profits increased by 14%. Despite this impressive growth, it was smaller lender Fio Banka that topped the country’s best-performing bank ranking with a score of 6.61. In second place was J&T Banka, with 6.02, while Moneta Money Bank came third with 5.01.  

In Hungary, out of the top four banks by Tier 1 capital, Magyar Kulkereskedelmi Bank emerged as the top performer, with a score of 7.5, thanks to its market-leading performance in profitability, operational efficiency, asset quality, return on risk and leverage. OTP Bank came second with a score of 6.63, accompanied by a chart-topping outcome in terms of its growth metrics. The other two Hungarian banks featured, Budapest Bank and MTB, scored 5.43 and 2.85 respectively.  

Impressive moves

A number of notable movements among the region’s top 100 banks by Tier 1 capital have occurred in the 2020 ranking. This includes the rise of Hungary’s OTP Bank, which climbed to second position from sixth place in the 2019 edition. Meanwhile, Estonia’s Luminor Bank, the result of merger and acquisition activity involving the Baltic operations of Nordea and DNB, is featured at position 18, rising from a previous rank of 60. In another impressive leap up the table, Bulgaria’s DSK Bank secured 25th from 48th in the previous edition.  

Of the 13 Romanian banks feature in the ranking, two made the regional top 20 by Tier 1 capital. In 16th place is Banca Transilvania, which retained its position, while Banca Comerciala Romana placed 17th, up from 20 previously. Both lenders enjoyed strong improvements in their Tier 1 capital positions. Meanwhile, in neighbouring Bulgaria, three of 11 banks featured in the ranking made it into the regional top 50 – DSK Bank plus UniCredit Bulbank and First Investment Bank.

Taken together, the 2020 ranking offers a glimpse of a CEE banking sector that has gone from strength to strength in recent times. With most lenders posting notable gains to their Tier 1 capital positions, in conjunction with positive growth to profitability and total assets, the regional banking system is well positioned to weather the coming challenges posed by the Covid-19 health crisis and growing geopolitical uncertainties. 


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