OTP: Banks will close 1,000 units

Banks are set to close down more than 1,000 territorial units this year, after having expanded their networks very aggressively in recent years, believes Laszlo Diosi, general manager of OTP Bank. “I wouldn’t be surprised if more than 1,000 units are closed by yearend. There’s a clear capacity surplus in the banking system,” said Diosi. In the first 6 months of the year, banks closed down 106 units. Thus, the total number of banking units countrywide fell to 6,446 units. Diosi points out that the biggest problems are registered by units opened since early 2008, which haven’t had the time to develop a client portfolio, thus also posting low incomes. On the other hand, he says that the market contraction period will offer banks the chance to better train their personnel, as the quality of provided services had considerably decreased in recent years amid the rapid increase in the number of banking employees. Diosi says OTP has moved to slash costs starting as early as the beginning of the year, so that he expects the 2009 income to top the 3m-RON level of 2008.