BA-CA: 190,000 new customers in South East Europe in 6 months
- BA-CA expands network significantly.
- Banking market in SEE has large growth potential.
The operations of Bank Austria Creditanstalt (BA-CA) in South East Europe (SEE) keep growing at a fast pace. Within the last six months, BA-CA has increased the number of its customers in SEE by 190,000 to 780,000. Compared to 1999, total assets in SEE increased fourfold to EUR 4.2 billion in 2002 (1999: EUR 0.9 billion). The market share has more than tripled since 2000, to almost 6 per cent (2000: 1.7 per cent). Today, BA-CA operates the largest network in the region of South East Europe, with subsidiaries in 7 countries.
"South East Europe is the growth market within the growth market. This market offers lots of opportunities. And we want to make use of them", says Friedrich Kadrnoska, Deputy CEO of BA-CA, responsible for the CEE region. Since 1999, BA-CA has invested EUR 370 million in the region of SEE. The bank acquired Splitska Banka, the third-largest Croatian bank, in spring 2002. In October 2002, BA-CA purchased Biochim, the fourth-largest bank in Bulgaria. Most recently, in October 2003, BA-CA acquired Central Profit Banka, the number three on the Bosnian banking market. Besides these acquisitions, the bank opened subsidiaries in Serbia and Montenegro (December 2001), in Bulgaria (April 2002), in Bosnia and Herzegovina (September 2002), and a representative office in Macedonia (March 2003).
“We will consistently continue our expansion in South East Europe and have set ambitious targets” says Friedrich Kadrnoska. By 2006, the number of customers in South East Europe should be more than one million. The ROE before taxes will increase to over 20 per cent, the cost income ratio will decrease to 58 per cent. In Romania, Serbia & Montenegro and Slovenia, BA-CA plans the opening of 16 new branches and will have a close look at possible acquisition targets. In Croatia, 32 new branches will be added to the network of Splitska Banka in the first quarter of 2004. In Macedonia, there are plans to establish an operating unit. The integration of Central Profit Banka and HVB Bank will be the next step in Bosnia and Herzegovina. Biochim, the Bulgarian subsidiary of BA-CA, will further develop its retail banking activities.
Banking market with great potential
Over the past few years South East Europe has become the growth market in Europe. From 2000 to 2002, the region's gross domestic product increased by an average annual rate of 4.2% in real terms. Thus South East Europe outperformed GDP growth, averaging a strong 3%, in the CEE countries which will join the European Union in 2004.
"With the successful implementation of comprehensive reforms, which are reflected in a favourable trend in inflation and exchange rate stability, the region has become substantially more attractive to foreign investors," says Marianne Kager, Chief Economist at Bank Austria Creditanstalt. "The annual inflow of foreign direct investment has increased to a level between 3.5% and 4.5% of GDP," she adds. The inflow of foreign capital is accompanied by technology transfer to the countries in South East Europe, supporting the modernisation of business companies and the development of an efficient export sector. The inflow of foreign direct investment reflects foreign investors' growing confidence in the sustained favourable economic trends in the region. In the next two years, South East Europe will remain Europe's most dynamic economic region, with average growth rates of over 4%.
The banking market is a major target industry for foreign direct investment in South East Europe. Foreign-owned banks still represent a smaller part of the banking industry than in the CEE countries which will join the EU in 2004. But a strong process of convergence is under way. In Bosnia and Herzegovina, for example, foreign banks now account for 56% of total assets in the banking sector, after 31% in the previous year, and in Bulgaria this figure has risen from 70% to over 80%. The attraction of the banking sector to foreign investors such as Bank Austria Creditanstalt is based on the enormous potential available in the market. "The level of financial intermediation is still very low," says Marianne Kager. Expressed as a percentage of GDP in South East Europe, combined total assets in the banking sector average just over 50%. This figure compares with just over 80% in Central and Eastern Europe and almost 200% in the euro area.
BA-CA in Central and Eastern Europe
Since the early 1990s, BA-CA has pursued a targeted strategy of expansion in Central and Eastern Europe (CEE). This early commitment to the region has given BA-CA clear advantages: today it operates the largest international network in the region. As a member of HVB Group, Bank Austria Creditanstalt is responsible for business development in the CEE markets.
Its network in CEE currently comprises about 920 offices, with 18,000 employees serving 3.8 million customers. Operations in CEE have total assets of EUR 22 billion, making Bank Austria Creditanstalt the leading international network bank in CEE. Its market share in the individual countries ranges between 5 and 10 per cent. For the first time in history, one bank received all important awards for its activities in CEE. Bank Austria Creditanstalt was named "Bank of the Year in Central and Eastern Europe", and "Best Bank in Central and Eastern Europe" by “The Banker”, “Euromoney” and “Global Finance”.
Requests: Bank Austria Creditanstalt, International Public Relations
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