Banks axe 3,700 jobs in Romania in 2012, foreign lenders' exposure down 7%

Banks active in Romania axed 3,700 jobs in the first half of this year, after reducing their headcount by 980 in 2011, according to a recent report from the Romanian Central Bank (BNR). This was part of the move to reduce expenses on personnel and the territorial network, at a higher pace than between 2009 and 2011. Banks in Romania closed down 353 units in the first half of 2012, almost three times the number of units closed in 2011. The Romanian banking system, which had around 6,600 units in the peak year 2008, now runs 5,700 units. Banks currently employ 62,000 people, down from almost 72,000 in the same peak year, 2008, according to BNR. Romania has 40 banks active, out of which 26 are majority owned by foreign investors, four are owned by Romanian investors, two are partially or totally owned by the Romanian state, and eight are subsidiaries of foreign banks. Foreign-owned banks, while still holding the majority of assets on the Romanian market, saw these assets declining, to 81.2 percent of total banking assets in Romania in the first half of 2012. The drop was caused by sales of assets and of non-performing loans while restructuring balance sheets. Exposure in Romania however went down slightly for foreign lenders, with a drop of 7 percent between December 2010 and June 2012, to EUR 19 billion. Austrian banks own the biggest slice of the pie in Romania – 38 percent in June 2012, while Greek Banks reduced their market share to 12.9 percent from 16.3 percent in 2011. Romanian banks managed to exceed the market share of Greek lenders, with a slice of 18.3 percent. The Romanian banking market continues to be highly connected to the European lending market, while also being highly concentrated: the top five banks in Romania based on assets had a bit more than half of the assets on the market – 55.2 percent, a slight increase, continuing a tendency started in 2010. The same trend was followed on the lending side – the first five lenders had 53.1 percent of the total loans in the Romanian banking system, according to BNR. Corina Chirileasa, corina@romania-insider.com