Banks achieve better cost control in H1

The banking system succeeded in improving cost management over the last year, so the share of costs in overall revenues fell by over 6 percentage points, from 62.73% in the first half of 2007, to 56.55% in the first half of 2008. At the end of last year, the cost/revenue ratio reached an all-time high of 76.2%, over 8% higher than in 2006. The biggest cost cuts came from large players in the first half of this year, such as BCR and Raiffeisen, which have ambitious plans to render operations more effective. In addition to cost control, the revenue rise also contributed to the improved ratio, but things differ greatly from one player to another depending on their stage of development on the market, so for some players, costs even exceed revenues, which generate losses. An important element in the banks’ cost structure has been, and remains, the expansion of territorial networks, which continue to grow by around 1,000 branches a year. From 4,933 agencies and branches in the summer of 2007, the banking system numbered almost 6,000 at the end of the first half of this year, up 21.5%.