Page 4 - bne_July 2021_20210602

4 I Companies & Markets bne July 2021
International banking groups look to expand in Central and Southeast Europe despite pandemic
Clare Nuttall in Glasgow
The latest CESEE Bank Lending Survey from the European Investment Bank (EIB) shows that international banking groups remain committed to the Central, Eastern and Southeast Europe region, with their strategies tilted “towards expansion or stability” despite the coronavirus (COVID-19) pandemic.
The survey, carried out in spring 2021, showed that around 60% of the banking groups intend to maintain operations in the region, while 30% intend to expand operations selectively. This is a more positive picture than in previous surveys.
More than 80% of banking groups surveyed expect their profitability in the region to be equal to or higher than their group’s total profitability over the next six months.
"Following the large negative COVID-19 shock, banking exposures in net balances to the region started to expand over the past six months,” says the report. The survey showed that the number of banks declaring a reduction in their exposures to the region was lower than those declaring an increase in exposures.
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“Our latest survey shows that the policy responses to the COVID-19 shock have been instrumental in limiting the most abrupt and negative effects for the banking sector in Central, Eastern and Southeastern Europe in 2020 and early 2021,” said the EIB vice-president responsible for economic studies, Ricardo Mourinho Félix.
Only a few banking groups signalled a contraction, and this was only in terms of intra-group funding. Meanwhile, banking groups expect an increase in cross-border exposures. However, there are different views across countries in the
“More than 80% of banking groups surveyed expect their profitability in the region to be equal to or higher than their group’s total profitability over the next six months”