The slowdown of growth in Western Europe will also have negative impact on growth in the CEE region. However, CEE will continue to register higher levels of GDP growth compared to the average European levels. This is what Gianni Papa, Head of the UniCredit Poland and CEE Division, said at a panel entitled “The future of banking in CEE” of the Euromoney conference in Vienna.

UniCredit forecasts a 0.8% growth of GDP in the Eurozone for 2012 and that is why it lowers its forecast for the growth of GDP in CEE by 0.9 percentage points up to 3%. For the end of 2011 data are expected to show growth of 4.4% for the region.

Despite the slowdown of growth the banking sector of CEE still has a lot of attractive growth opportunities to offer, said the moderator of the panel, Mark Johnson, editor of the international magazine Euromoney.

Although the total volume of credit in CEE must have reached 1.5 trillion in the end of 2011 which is equal to approximately 9% of annual growth, the credit to GDP ratio for the region firmly remains at 49% whereas for the Eurozone it is 120%, UniCredit estimates show.

Gianni Papa and other participants in the panel unanimously agreed that for 2012 wide variations in growth are expected within the countries of the CEE region itself. According to UniCredit Turkey, Poland and Russia will have the greatest contribution to growth in CEE and Kazakhstan is expected to rank first in terms of growth. Slovenia, Croatia and probably Hungary will go back to recession while other countries, including Bulgaria, are expected to achieve growth of slightly above 2% for 2012.

Countries with the most rapidly developing economies will also offer the most favorable environment for growth of the banking sector.

Gianni Papa believes that the quality of assets and the provision of stable capital base will be among the major challenges facing the banking sector over the next three years. “You can never have too much capital in the context of challenging economic environment”, says Gianni Papa.

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