UniCredit announced a positive forecast for Central and Eastern Europe (CEE) at the recent European Bank for Reconstruction and Development annual meeting in Nicosia, Cyprus, citing the bank’s CEE Banking Outlook.
The outlook shows good developments in the region’s economic environment, according to a press release.
"The level of profitability of the banking sector varies across the region, but overall 2017 was the first year in which the sector reported growth in all countries of the region,” UniCredit CEE Director Carlo Vivaldi said in the release. “Some of the weaknesses of the sector before the crisis of 2008-2009 are removed: (We are) now seeing a more sustainable funding model, better risk management and continuous improvement of asset quality.”
According to UniCredit, 2017 is set to be the first year since the 2008-09 financial crisis that most CEE countries will have gross domestic product growth of more than 3 percent, the threshold for a stable designation. UniCredit expects digital banking to play a strong role in the coming years and that the rate of nonperforming loans will fall.
"The gradual improvement in the allocation of resources of the loan should help contribute to a decrease in the ratio of bad loans to total loans,” Mauro Mara, UniCredit CEE region strategies and forecasts coordinator, said. “Profit sector has grown strongly over the past year, supported by one-off factors, but is expected to fall marginally during 2017 and remain without a significant change in 2018.”