Banks' profits to rise 37% by 2008

Romania ranks third in the region in terms of prospects to increase the banks’ profitability, behind Russia and Bulgaria, reads a UniCredit study on the progress of the banking system in Central and Eastern Europe. UniCredit experts expect the gross cumulated profit of Romanian banks to grow by 11% on the average between 2006 and 2008, mainly driven by lending to the retail segment. The Italian bank estimates that the loans granted by local banks to retail clients will see a 38% yearly growth in this period. As a matter of fact, retail lending is the catalyst driving the banking market throughout the whole region, reads the UniCredit report. Romania also ranks third in terms of overall lending, with volumes of loans granted last year seeing a 22% average growth. However, it is not only retail credit, but also corporate loans which will witness a significant growth, stimulated by the favourable macroeconomic climate and by the massive demand for investment, say the authors of the UniCredit report.