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Top 100 CEE EU banks ranking: Poland and Czech Republic hold sway

Central and eastern European banks in the EU faced a sluggish 2013, but Poland led the region in terms of growth and the Czech Republic in terms of returns. Baltic banks are also starting to rise to the challenge.
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Top 100 CEE EU banks ranking: Poland and Czech Republic hold sway

The year 2013 was a bleak one for EU countries in central and eastern Europe (CEE) – many of its economies spent the year either mired in recession or emerging from one.

This state of affairs affected local banking. In this inaugural Top 100 CEE EU ranking, the region recorded smaller aggregate banking profits than the year before, and for Slovenia and Hungary, 2013 was the second consecutive year of losses, as many of their large banks were still in the red. 

Poland’s pluses

Economic growth was likewise low in Poland, which had its most difficult year in 2013, despite recording a rise in gross domestic product during every year of the financial crisis. While conditions prevented the country’s banks from experiencing a wider upturn, they still achieved notable growth.

Polish institutions outperformed all others in the region in terms of Tier 1 capital with a 17.61% increase. Balance sheets at Polish banks likewise expanded more than in neighbouring countries. At 13.61%, the growth was one percentage point higher than in Latvia, the closest runner-up. This is significant, given Polish banks are already large – they hold 35.95% of all CEE EU assets in The Banker’s ranking.

Polish lenders occupy five positions in the top 10 ranking by Tier 1 capital, with UniCredit-owned Bank Pekao in first position with $6.56bn in Tier 1 capital. The bank is followed by another Polish institution, PKO Bank Polski, which holds $6.51bn capital, and Hungarian OTP with a $5.86bn capital base.

Bank Gospodarstwa Krajowego earns the accolade for the largest Tier 1 capital expansion, with a staggering 291.78% growth. With a cost-to-income ratio of 19.33%, the bank is also the second least expensive to run.

Bank Zachodni WBK is another Polish institution that posted a large Tier 1 capital increase in 2013, earning it the ninth position in the overall ranking. The bank showed 35.89% growth, which brought its capital up to $2.51bn.

WBK also grew its balance sheet considerably due to a merger with Kredyt Bank, which increased its total assets by 81.92% to $35.22bn. In terms of asset growth it was second only to Lithuania’s Siauliu Bankas, which saw its balance sheet expand by 88.19% with the takeover of ailing Ukio Bankas.

Despite this expansion, WBK managed to maintain high profitability. It ranked second in terms of return on capital (ROC) with 33.28%, and eighth in terms of return on assets (ROA) at 2.37%.

Buoyant Czechs

Unlike Poland, Czech Republic saw its economy contract for most of 2013, only to pick up in the second part of the year. As a consequence, its banks posted smaller profits in 2013 than the year before, while still boasting the highest ROC and second highest ROA after Estonia in the rankings.

Czech lenders are still a significant presence in the region. They own 17.71% of aggregate banking assets in the top 100 ranking, placing them second only to Poland. Moreover, three of the country’s banks, Ceska sporitelna, Komercni banka and CSOB, figure in the top 10 of the ranking.

With an ROC of 20.57%, Czech institutions have an indisputable lead over the region’s other banks by this measure. The country’s largest banks are also its highest earners. CSOB is the highest ROC scorer in the Czech Republic, having earned a 29.09% return in 2013, with Komercni banka and Ceska sporitelna showing 25.49% and 23.28% returns, respectively.

The top spot in the table, however, belongs to Latvia's Rietumu Banka, which earned an impressive 41.95% return. The bank also showed a high ROA at 2.44%. It is followed in the third spot in the ROC ranking by another Latvian institution, ABLV Bank, which returned a 32.97% ROC. This does not come as a surprise – Latvian banks rank third in terms of aggregate ROC with 16.22%, and also have the third highest aggregate ROA at 1.57%.

The top country for ROA was Estonia; its banks earned a 2.26% ROA in 2013. However, the highest ROA earner was GE Capital’s Czech subsidiary, GE Money Bank, with a 3.67% return.

Notably, two Baltic subsidiaries of Swedish-owned Swedbank also earned high ROAs – Swedbank Latvia and Swedbank Estonia showed returns of 2.63% and 2.56%, respectively. 

The Banker's Top 100 CEE EU banks ranking, 2015 originally appeared in the May 2015 issue of the magazine. The full results of the ranking are available on The Banker DatabaseFind out more about the database, register for a free trial or subscribe today.

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