East-European and CIS markets increase the wealth of international banks

Demand for cars, apartments and other goods from South-European and CIS member countries is speculated at maximum by international banks. A research of Reiffeisen International (RZB) and Reiffeisen Centrobank found that the banking market of the region has increased by 31.3%. According to the research, the banking field will grow very fast in CIS member countries, especially in Russia, Ukraine and Belarus. After the 15% increase of region’s banking market in 2004, in the last year the banking industry went up 31.3% or by EUR 645 bln. Together with the Central and East European countries the study also covers the members of the Commonwealth of Independent States. The most substantial increases were registered in Ukraine (91%), Belarus(54%) and in Russia, region’s biggest banking market (51%). In Moldova, the banking industry has increased by 35.44% in 2005, little over the regional average. At the same time, Hungary had the poorest increase, of only 15%. The analysts of RZB and Raffeisesn Centrobank say that until 2009, the volume of the market will double, reaching EUR 1700 bln compared with EUR 846 bln, the present amount. Until 2014, analysts forecast a total market volume of about EUR 3700 bln, according to an annual average increase rate of about 18%. The forecast model is based on the relation between GDP per capita and the level of financial intermediacy, measured as percent of banking assets in the total GDP. Local experts forecast for the next four years a doubling of the assets of the Moldovan banking system, which amounts at present to almost MDL 20 bln (about EUR 1.2 bln).

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