ECONOMIC INDICATORS BULLETIN IN SOUTHEASTERN EUROPE/media/com/2015/files/internati… · expressly...

NOVEMBER 2015 – Νο. 35

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ECONOMIC INDICATORS BULLETIN FOR SOUTH-EASTERN EUROPE

During the first few months of 2015H2, we observed a stabilizing trend – and in some countries even an improvement – in the non-performing loans ratio. This trend resulted from the coordinated efforts of the region’s Central Banks to tackle the high levels of non-performing loans and to improve the loan portfolio, with the aim of starting a recovery in credit expansion and economic activity.

• In Albania, non-performing loans amounted to 20.23% of total loans in September compared to 20.03% in June and 24.88% in September last year.

• In Bulgaria, non-performing loans amounted to 18.3% of total loans in September compared to 18.7% in June and 18.1% in September last year.

• In Cyprus, non-performing loans amounted to 46.0% of total loans in September compared to 47.3% in June.

• In Romania, non-performing loans amounted to 12.33% of total loans in September compared to 12.8% in June and 15.3% in September last year.

• In Serbia, non-performing loans amounted to 22.0% of total loans in September compared to 22.8% in June and 23.0% in September last year.

Bilateral Exchange Rates vs. the Euro (30th November 2015)

CDS 5Y USD

-1.0 -0.5 0.0 0.5 1.0 1.5 2.0

LEK

RON

RSD

%

Year to Date Change

Devaluation Revaluation

200250300350400450500550600650700

80100120140160180200220240

1-Oc

t-14

23-O

ct-14

14-N

ov-1

46-

Dec-1

428

-Dec

-14

19-Ja

n-15

10-Fe

b-15

4-M

ar-15

26-M

ar-1

517

-Apr

-159-

May

-1531

-May

-15

22-Ju

n-15

14-Ju

l-15

5-Au

g-15

27-A

ug-1

518

-Sep-

1510

-Oct-

151-

Nov-1

523

-Nov

-15

basis pointsbasis points

Bulgaria(L) Romania(L) Cyprus(R )

Source: Piraeus Bank Research, Datastream, Bloomberg

2


Α. ALBANIA • In Jan-Oct, the fiscal deficit contracted to 1.3% of GDP from 2.4% in Jan-Oct 2014, due to a decrease in public spending to 22.6% from 23.8% for the same periods. In Jan-Oct, revenues amounted to 21.3% of GDP from 21.4% in the same period last year. (Graph 1.2)

• In September, private sector lending contracted for a third consecutive month, falling by 2.3% YoY from an increase of 1.7% in September last year, as business loans decreased by 4.1% from an increase of 2.3% for the same months. Household lending increased by 2.5% YoY in September compared to 0.5% in September last year, while private sector deposits increased by 1.2% from 0.2% in the same months. (Graphs 1.5 & 1.8) 1.0 Real GDP & Economic Sentiment Index 1.1 Inflation, Base Effect & Food Prices

60

65

70

75

80

85

90

95

100

105

110

-3

-2

-1

0

1

2

3

4

5

6

7

Q4 2

010

Q1 2

011

Q2 2

011

Q3 2

011

Q4 2

011

Q1 2

012

Q2 2

012

Q3 2

012

Q4 2

012

Q1 2

013

Q2 2

013

Q3 2

013

Q4 2

013

Q1 2

014

Q2 2

014

Q3 2

014

Q4 2

014

Q1 2

015

Q2 2

015

Q3 2

015

% YoY

Real GDP(L) Economic Sentiment Indicator(R )

-2

-1

0

1

2

3

4

5

6

7

-1.4

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

Oct

-11

Jan-

12

Apr-

12

Jul-1

2

Oct

-12

Jan-

13

Apr-

13

Jul-1

3

Oct

-13

Jan-

14

Apr-

14

Jul-1

4

Oct

-14

Jan-

15

Apr-

15

Jul-1

5

Oct

-15

% YoY%

Base Effect (t-12) (L) Inflation ( R) Food Prices ( R)

1.2 Fiscal Balance 1.3 Current Account Deficit

-6

-5

-4

-3

-2

-1

0

1

Janu

ary

Jan.

-Feb

.

Jan.

-Mar

.

Jan.

-Apr

.

Jan.

-May

Jan.

-Jun.

Jan.

-July

Jan.

-Aug

.

Jan.

-Sep

.

Jan.

-Oct

.

Jan.

-Nov

.

Jan.

-Dec

.

% GDP

2011 2012 2013 2014 2015

-12

-10

-8

-6

-4

-2

0

Q I 2

013

Q II

201

3

Q II

I 201

3

Q IV

201

3

Q I 2

014

Q II

201

4

Q II

I 201

4

Q IV

201

4

Q I 2

015

Q2

2015

% GDP

Source: Piraeus Bank Research, Datastream, National Sources

3


1.4 Employment Expectations 1.5 Private Sector Deposits & Unemployment Rate

-30-25-20-15-10-505

101520

Q1 2

009

Q3 2

009

Q1 2

010

Q3 2

010

Q1 2

011

Q3 2

011

Q1 2

012

Q3 2

012

Q1 2

013

Q3 2

013

Q1 2

014

Q3 2

014

Q1 2

015

Q3 2

015

Current Employment SitutationEmployment Expectations

12

13

14

15

16

17

18

19

0

2

4

6

8

10

12

14

16

18

20

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Mar

-14

Sep-

14

Mar

-15

Sep-

15

%% YoY

Deposits(L) Unemployment Rate(R ) 1.6 Loan Portfolio Quality 1.7 NPLs & Capital Adequacy Ratio

79.8%

5.2%

4.4%

10.6%

20.2%

Loan Portfolio Quality September 2015

Standard exposures Sub-standard loansDoubtful loans Loss loans

60

65

70

75

80

85

5

10

15

20

25

30

Q3 20

09

Q1 20

10

Q3 20

10

Q1 20

11

Q3 20

11

Q1 20

12

Q3 20

12

Q1 20

13

Q3 20

13

Q1 20

14

Q3 20

14

Q1 20

15

Q3 20

15

%%

Non-Performing Loans % Total Loans (L)Capital Adequacy Ratio-(TIER-1) ( R)

1.8 Private Sector Credit & Deposits 1.9 Monetary Conditions Index (MCI)

-10

0

10

20

30

40

50

Aug-0

8Ja

n-09

Jun-

09No

v-09

Apr-1

0Se

p-10

Feb-

11Ju

l-11

Dec-1

1M

ay-1

2Oc

t-12

Mar

-13

Aug-1

3Ja

n-14

Jun-

14No

v-14

Apr-1

5Se

p-15

% YoY

Credit Deposits

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Nov-1

1Fe

b-12

May

-12

Aug-1

2No

v-12

Feb-

13M

ay-1

3Au

g-13

Nov-1

3Fe

b-14

May

-14

Aug-1

4No

v-14

Feb-

15M

ay-1

5Au

g-15

Nov-1

5

Interest rate EUR/ALL MCI

Tight MCEasing MC

Note: The index is a weighted sum of the annual change in the policy rate (60% weight) and the fx rate (40% weight).

2.0 EUR/ALL & Imports to Exports Coverage 2.1 Central Bank’s Lending Survey in the next Q.

20

25

30

35

40

45

50

55

60

135

136

137

138

139

140

141

142

143

Sep-

11

Jan-1

2

May

-12

Sep-

12

Jan-1

3

May

-13

Sep-

13

Jan-1

4

May

-14

Sep-

14

Jan-1

5

May

-15

Sep-

15

EUR/ALL (L) Percentage of Cover ( R)

-40

-30

-20

-10

0

10

20

30

40

2009

Q3

2010

Q1

2010

Q3

2011

Q1

2011

Q3

2012

Q1

2012

Q3

2013

Q1

2013

Q3

2014

Q1

2014

Q3

2015

Q1

2015

Q3

Business loans Households loans

Easing of Credit Standards

Tightening of Credit Standards


4


Β. BULGARIA • In Jan-Sep, the fiscal balance posted a surplus of 0.8% of GDP compared to a deficit of 1.8% in Jan-Sep last year, as revenues increased significantly to 29.1% of GDP from 26.2% in the same period last year. Public spending in Jan-Sep was 27.6% of GDP from 27.2% in Jan-Sep last year. (Graph 1.2)

• In October, private sector credit contracted further by 10.2% YoY from an increase of 1.9% in October 2014, as business loans decreased by 14.7% from an increase of 3.0% for the same months. Household lending contracted by 1.2% in October from a marginal increase of 0.01% in October 2014, while there was a private sector increase of 0.9% YoY from 5.4% for the same months. (Graph 2.0)

1.0 Leading Indicators 1.1 Inflation & Base Effect

0

20

40

60

80

100

120

140

-60

-50

-40

-30

-20

-10

0

10

20

Oct-0

8Ap

r-09

Oct-0

9Ap

r-10

Oct-1

0Ap

r-11

Oct-1

1Ap

r-12

Oct-1

2Ap

r-13

Oct-1

3Ap

r-14

Oct-1

4Ap

r-15

Oct-1

5

Consumer Confidence Index(L)

Industrial Confidence Indicator(L)

Economic Sentiment Index(R)

-4

-2

0

2

4

6

8

-2

-1

-1

0

1

1

2

Oct-1

2

Jan-1

3

Apr-1

3

Jul-1

3

Oct-1

3

Jan-1

4

Apr-1

4

Jul-1

4

Oct-1

4

Jan-1

5

Apr-1

5

Jul-1

5

Oct-1

5

%

Base Effect (L) Inflation (R) Food Prices (R)

% YoY

1.2 Fiscal Balance 1.3 Current Account Balance

-4

-3

-2

-1

0

1

2

Janu

ary

Febr

uary

Mar

ch

April

May

June July

Augu

st

Sept

embe

r

Octo

ber

Nove

mber

Dece

mbe

r

% GDP

2012 2013 2014 2015

-2-2-1-10112233

Sep-

11D

ec-1

1M

ar-1

2Ju

n-12

Sep-

12D

ec-1

2M

ar-1

3Ju

n-13

Sep-

13D

ec-1

3M

ar-1

4Ju

n-14

Sep-

14D

ec-1

4M

ar-1

5Ju

n-15

Sep-

15

% GDP

Current Account Source: Piraeus Bank Research, Datastream, National Sources

5


1.4 Fiscal Reserves 1.5 Industrial Production & Retail Sales

-2

0

2

4

6

8

10

12

Sep-

09De

c-09

Mar

-10

Jun-

10Se

p-10

Dec-

10M

ar-1

1Ju

n-11

Sep-

11De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-

12M

ar-1

3Ju

n-13

Sep-

13De

c-13

Mar

-14

Jun-

14Se

p-14

Dec-

14M

ar-1

5Ju

n-15

Sep-

15

EUR bn.

Fiscal Reserves

-25

-20

-15

-10

-5

0

5

10

15

Sep-0

9De

c-09

Mar

-10

Jun-

10Se

p-10

Dec-1

0M

ar-1

1Ju

n-11

Sep-1

1De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-1

2M

ar-1

3Ju

n-13

Sep-1

3De

c-13

Mar

-14

Jun-

14Se

p-14

Dec-1

4M

ar-1

5Ju

n-15

Sep-1

5

% YoY

Industrial Production (6m MA) Retail Sales (6m MA) 1.6 Unemployment Rate 1.7 Foreign Claims

6

7

8

9

10

11

12

13

14

Sep-

09De

c-09

Mar

-10

Jun-

10Se

p-10

Dec-1

0M

ar-1

1Ju

n-11

Sep-

11De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-1

2M

ar-1

3Ju

n-13

Sep-

13De

c-13

Mar

-14

Jun-

14Se

p-14

Dec-1

4M

ar-1

5Ju

n-15

Sep-

15

%

Unemployment R ate

5

10

15

20

25

30

35

Sep-

08De

c-08

Mar

-09

Jun-

09Se

p-09

Dec-

09M

ar-1

0Ju

n-10

Sep-

10De

c-10

Mar

-11

Jun-

11Se

p-11

Dec-

11M

ar-1

2Ju

n-12

Sep-

12De

c-12

Mar

-13

Jun-

13Se

p-13

Dec-

13M

ar-1

4Ju

n-14

Sep-

14De

c-14

Mar

-15

% Bulgaria's GDP

Austrian Bank s Greek Banks Italian Banks 1.8 FX Reserves & Monetary Base 1.9 Unemployment Rate, NPLs & Capital Adequacy

70

90

110

130

150

170

190

210

230

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.0

Sep-

09De

c-09

Mar-1

0Jun

-10Se

p-10

Dec-1

0Ma

r-11

Jun-11

Sep-

11De

c-11

Mar-1

2Jun

-12Se

p-12

Dec-1

2Ma

r-13

Jun-13

Sep-

13De

c-13

Mar-1

4Jun

-14Se

p-14

Dec-1

4Ma

r-15

Jun-15

Sep-

15

%

FX Reserves as % Short-Term External Debt(R )Reserves/Monetary Base(L)

0

5

10

15

20

579

111315171921232527

2009

q2

2009

q3

2009

q4

2010

q1

2010

q2

2010

q3

2010

q4

2011

q1

2011

q2

2011

q3

2011

q4

2012

q1

2012

q2

2012

q3

2012

q4

2013

q1

2013

q2

2013

q3

2013

q4

2014

q1

2014

q2

2014

q3

2014

q4

2015

q1

2015

q2

%%

Tier I Capital Adequacy ratio (L)

NPLs % of total (R )

Unemployment rate (R) 2.0 Deposits & Unemployment Rate 2.1 Monetary Conditions Index (MCI)

0

2

4

6

8

10

12

14

-10

-5

0

5

10

15

20

Oct-0

9Fe

b-10

Jun-

10Oc

t-10

Feb-

11Ju

n-11

Oct-1

1Fe

b-12

Jun-

12Oc

t-12

Feb-

13Ju

n-13

Oct-1

3Fe

b-14

Jun-

14Oc

t-14

Feb-

15Ju

n-15

Oct-1

5

%% YoY

Deposits(L) Unemployment R ate(R )

-3.5

-2.5

-1.5

-0.5

0.5

1.5

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

3

Jul-1

3

Oct-1

3

Jan-

14

Apr-1

4

Jul-1

4

Oct-1

4

Jan-

15

Apr-1

5

Jul-1

5

Oct-1

5

Nomi nal Effective Exchange Rate Interest rate MCINote: The index is a weighted av erage of the annual change in interest rate SOFIBOR-3m (60% weight) and the nominal weighted f x rate (Nominal Ef f ective Exchange Rate - NEER, 40% weight)

Tight MCEasing MC

Source: Piraeus Bank Research, Datastream, National Sources, BIS

6


C. CYPRUS • In Jan-Aug, the fiscal surplus contracted by 0.1% of GDP compared to 0.9% in Jan-Aug 2014, as revenues decreased by 2.2% YoY and public spending increased by 1.1% YoY. (Graph 1.2)

• In October, total credit contracted by 2.4% YoY from a decrease of 3.0% in October 2014, as business and household loans both contracted at a similar rate. It is worth noting that private sector deposits increased in October for the first time since December 2012, specifically by 0.4% YoY from -4.9% in the same month last year. (Graph 2.0)

1.0 Real GDP & Economic Sentiment Indicator (ESI) 1.1 Inflation & Base Effect

-8

-6

-4

-2

0

2

4

6

60

70

80

90

100

110

120

Sep-

05M

ar-0

6Se

p-06

Mar

-07

Sep-

07M

ar-0

8Se

p-08

Mar

-09

Sep-

09M

ar-1

0Se

p-10

Mar

-11

Sep-

11M

ar-1

2Se

p-12

Mar

-13

Sep-

13M

ar-1

4Se

p-14

Mar

-15

Sep-

15

% YoY

GDP (L) Economic Sentiment Indicator (R )

-8

-6

-4

-2

0

2

4

6

8

10

12

Oct-1

1

Feb-

12

Jun-

12

Oct-1

2

Feb-

13

Jun-

13

Oct-1

3

Feb-

14

Jun-

14

Oct-1

4

Feb-

15

Jun-

15

Oct-1

5

%

Base Effect Inflation Food Prices 1.2 Fiscal Balance 1.3 Public Debt

-6

-5

-4

-3

-2

-1

0

1

2

Janu

ary

Febr

uary

Mar

ch

April

May

June July

Augu

st

Sept

embe

r

Octo

ber

Nove

mbe

r

Dece

mbe

r

% GDP

2012 2013 2014 2015

40

50

60

70

80

90

100

110

120

Jun-

07

Dec-

07

Jun-

08

Dec-

08

Jun-

09

Dec-

09

Jun-

10

Dec-

10

Jun-

11

Dec-

11

Jun-

12

Dec-

12

Jun-

13

Dec-

13

Jun-

14

Dec-

14

Jun-

15

% GDP

Net Tot al Debt


7


1.4 Current Account Balance (6m MA) 1.5 Industrial Production, Retail Sales & Tourist Arrivals

-18.0

-16.0

-14.0

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

Jun-

08De

c-08

Jun-

09De

c-09

Jun-

10De

c-10

Jun-

11De

c-11

Jun-

12De

c-12

Jun-

13De

c-13

Jun-

14De

c-14

Jun-

15

% GDP

Current Account Deficit

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

3

Jul-1

3

Oct-1

3

Jan-

14

Apr-1

4

Jul-1

4

Oct-1

4

Jan-

15

Apr-1

5

Jul-1

5

Oct-1

5

% YoY

Industr ial P roduction Retail SalesTourist Arr ivals

1.6 Mortgage Loans & Producer’s Price Index in Construction

1.7 Construction Cost & Building Permits

-10

-8

-6

-4

-2

0

2

4

-10

-5

0

5

10

15

Sep-

09De

c-09

Mar-1

0Ju

n-10

Sep-

10De

c-10

Mar-1

1Ju

n-11

Sep-

11De

c-11

Mar-1

2Ju

n-12

Sep-

12De

c-12

Mar-1

3Ju

n-13

Sep-

13De

c-13

Mar-1

4Ju

n-14

Sep-

14De

c-14

Mar-1

5Ju

n-15

Sep-

15

% YoY% YoY

Mortgages(L)

Producers' Price Index in Construction(R)

-4

-3

-2

-1

0

1

2

3

4

5

-35

-30

-25

-20

-15

-10

-5

0

5

10

15Oc

t-10

Jan-1

1Ap

r-11

Jul-1

1Oc

t-11

Jan-1

2Ap

r-12

Jul-1

2Oc

t-12

Jan-1

3Ap

r-13

Jul-1

3Oc

t-13

Jan-1

4Ap

r-14

Jul-1

4Oc

t-14

Jan-1

5Ap

r-15

Jul-1

5Oc

t-15

% YoY% YoY

Building Permits (R,3m MA)Construction Cost Index(L)

1.8 EUR/GBP & Tourism Revenues 1.9 Unemployment Rate

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

0.7

0.8

0.8

0.9

0.9

1.0

Jun-09

Nov-0

9

Apr-1

0

Sep-

10

Feb-

11

Jul-1

1

Dec-1

1

May

-12

Oct-1

2

Mar

-13

Aug-1

3

Jan-1

4

Jun-14

Nov-1

4

Apr-1

5

Sep-

15

EUR mn.

EUR/GBP (L) Tour ist revenues, 12-M Mov ing Average ( R)

02468

1012141618

Sep-

09De

c-09

Mar

-10

Jun-

10Se

p-10

Dec-1

0M

ar-1

1Ju

n-11

Sep-

11De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-1

2M

ar-1

3Ju

n-13

Sep-

13De

c-13

Mar

-14

Jun-

14Se

p-14

Dec-1

4M

ar-1

5Ju

n-15

Sep-

15

%

Unemployment Rate

2.0 Loans & Deposits 2.1 Monetary Conditions Index (MCI)

-40

-30

-20

-10

0

10

20

30

40

Oct-0

9

Feb-

10

Jun-

10

Oct-1

0

Feb-

11

Jun-

11

Oct-1

1

Feb-

12

Jun-

12

Oct-1

2

Feb-

13

Jun-

13

Oct-1

3

Feb-

14

Jun-

14

Oct-1

4

Feb-

15

Jun-

15

Oct-1

5

% ΥοΥ

Loans Deposits

Residents Deposits Rest of t he World Deposits

-2.5-2.0-1.5-1.0-0.50.00.51.01.52.0

Oct-1

1De

c-11

Feb-

12Ap

r-12

Jun-

12Au

g-12

Oct-1

2De

c-12

Feb-

13Ap

r-13

Jun-

13Au

g-13

Oct-1

3De

c-13

Feb-

14Ap

r-14

Jun-

14Au

g-14

Oct-1

4De

c-14

Feb-

15Ap

r-15

Jun-

15Au

g-15

Oct-1

5

Nomi nal Effective Exchange RateInterest rateMCI

Note: The index is a weighted average of the annual change in interest rate EURIBOR-3m (60% weight) and the nominal weighted fx rate (Nominal Effective Exchange Rate - NEER, 40% weight)

Tight MCEasing MC


8


D. ROMANIA • In Jan-Oct, the fiscal surplus widened to 1.3% of GDP from 0.3% in Jan-Oct 2014, as public spending declined to 26.1% of GDP from 26.3% for the same periods. Revenues increased to 27.4% of GDP in Jan-Oct from 26.6% for the same period last year. (Graph 1.2)

• Total credit in October increased by 0.5% YoY from -3.2% in October last year, while private sector credit increased by 0.3% from -3.3% in the same months. Local currency loans in the private sector increased by 16.0% in October from 8.3% in the same month last year, whereas foreign currency loans contracted by 11.9% from -11.2% in the same months. Total deposits increased by 7.5% YoY in October from 8.0% in October 2014, while private sector deposits increased by 7.2% from 4.8% for the same months. (Graphs 1.8 & 1.9)


-10

-5

0

5

10

15

60

70

80

90

100

110

120

Sep-

04M

ar-0

5Se

p-05

Mar

-06

Sep-

06M

ar-0

7Se

p-07

Mar

-08

Sep-

08M

ar-0

9Se

p-09

Mar

-10

Sep-

10M

ar-1

1Se

p-11

Mar

-12

Sep-

12M

ar-1

3Se

p-13

Mar

-14

Sep-

14M

ar-1

5Se

p-15

% YoY

GDP (L) Economic Sentiment Indicator (R )

-8

-6

-4

-2

0

2

4

6

8

-0.8-0.6-0.4-0.20.00.2

0.40.60.81.01.2

Oct-1

1

Feb-

12

Jun-

12

Oct-1

2

Feb-

13

Jun-

13

Oct-1

3

Feb-

14

Jun-

14

Oct-1

4

Feb-

15

Jun-

15

Oct-1

5

% YoY%

Base Effect(L) Inflation(R ) Food Prices(R )


-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

Janu

ary

Febr

uary

Mar

ch

April

May

June July

Augu

st

Sept

embe

r

Octo

ber

Nove

mbe

r

Dece

mbe

r

% GDP

2012 2013 2014 2015

-1.5

-1.0

-0.5

0.0

0.5

Jan-

13Fe

b-13

Mar

-13

Apr-

13M

ay-1

3Ju

n-13

Jul-1

3Au

g-13

Sep-

13O

ct-1

3N

ov-1

3D

ec-1

3Ja

n-14

Feb-

14M

ar-1

4Ap

r-14

May

-14

Jun-

14Ju

l-14

Aug-

14Se

p-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15Fe

b-15

Mar

-15

Apr-

15M

ay-1

5Ju

n-15

Jul-1

5Au

g-15

Sep-

15O

ct-1

5

% GDP

Curren t Account Balance


9


1.4 Non-Performing Loans 1.5 Industrial Production & Exports

10

15

20

25

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr-

14M

ay-1

4Ju

n-14

Jul-1

4Au

g-14

Sep-

14O

ct-1

4N

ov-1

4D

ec-1

4Ja

n-15

Feb-

15M

ar-1

5Ap

r-15

May

-15

Jun-

15Ju

l-15

Aug-

15Se

p-15

%

NPLs as % of Total Loans

-5

0

5

10

15

20

25

30

35

40

0

2

4

6

8

10

12

14

Sep-

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

Sep-

13

Jan-

14

May

-14

Sep-

14

Jan-

15

May

-15

Sep-

15

% YoY% YoY

Industr ial Production, 6-M MA (L) Exports, 6-M MA ( R)

1.6 Unemployment Rate 1.7 FX Reserves as % of Short-Term External Debt

6.4

6.5

6.6

6.7

6.8

6.9

7.0

7.1

7.2

7.3

Sep-

09De

c-09

Mar

-10

Jun-

10Se

p-10

Dec-

10M

ar-1

1Ju

n-11

Sep-

11De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-

12M

ar-1

3Ju

n-13

Sep-

13De

c-13

Mar

-14

Jun-

14Se

p-14

Dec-

14M

ar-1

5Ju

n-15

Sep-

15

Unemployment Rate

100.0

120.0

140.0

160.0

180.0

200.0

220.0

24000

26000

28000

30000

32000

34000

36000

Sep-

09Jan

-10

May

-10Se

p-10

Jan-1

1M

ay-11

Sep-

11Jan

-12

May

-12Se

p-12

Jan-1

3M

ay-13

Sep-

13Jan

-14

May

-14Se

p-14

Jan-1

5M

ay-15

Sep-

15

EUR mn.

FX Reserves (L)

FX Reserves % Short-Term External Debt ( R) 1.8 Credit Expansion & FX Rate 1.9 Deposits & Unemployment Rate

3.8

3.9

4

4.1

4.2

4.3

4.4

4.5

4.6

4.7

-15

-10

-5

0

5

10

15

20

Aug-

10

Dec-1

0

Apr-1

1

Aug-

11

Dec-1

1

Apr-1

2

Aug-

12

Dec-1

2

Apr-1

3

Aug-

13

Dec-1

3

Apr-1

4

Aug-

14

Dec-1

4

Apr-1

5

Aug-

15

% ΥοΥ

Private Sector Loans(L) Private Sector Loans in FX(L)

EUR/RON(R )

6.00

6.20

6.40

6.60

6.80

7.00

7.20

7.40

0

2

4

6

8

10

12

14

Aug-

10

Dec-1

0

Apr-1

1

Aug-

11

Dec-1

1

Apr-1

2

Aug-

12

Dec-1

2

Apr-1

3

Aug-

13

Dec-1

3

Apr-1

4

Aug-

14

Dec-1

4

Apr-1

5

Aug-

15

% ΥοΥ

Private Sector Deposits(L) Unemployment R ate(R ) 2.0 Unemployment Rate & Capital Adequacy 2.1 Monetary Conditions Index (MCI)

5

6

6

7

7

8

0

2

4

6

8

10

12

14

16

18

20

2008

Q2

2008

Q4

2009

Q2

2009

Q4

2010

Q2

2010

Q4

2011

Q2

2011

Q4

2012

Q2

2012

Q4

2013

Q2

2013

Q4

2014

Q2

2014

Q4

2015

Q2

% %

Capital adequacy (Α) Unemployment( R)

-8

-6

-4

-2

0

2

4

Sep-

10

Jan-1

1

May

-11

Sep-

11

Jan-1

2

May

-12

Sep-

12

Jan-1

3

May

-13

Sep-

13

Jan-1

4

May

-14

Sep-

14

Jan-1

5

May

-15

Sep-

15

Nomi nal Effectiv e Exchange Rate Interest rate MCI

Note: The index is a weighted av erage of the annual change in interest rate SOFIBOR-3m (60% weight) and the nominal weighted f x rate (Nominal Ef f ective Exchange Rate - NEER, 40% weight)

Tight MCEasing MC


10


Ε. SERBIA • In Jan-Oct, the fiscal deficit shrank significantly to 1.6% of GDP from 4.4% in Jan-Oct 2014 due to a decrease in public spending. Specifically, in Jan-Oct, revenues were 34.6% of GDP from 37.3% in Jan-Oct last year, while public spending decreased significantly to 36.2% from 41.7% for the same periods. (Graph 1.2)

• In October , total loans increased by 3.1% YoY from 1.1% in the same month in 2014, with business and household lending both increasing. Total deposits increased by 5.8% YoY in October from 5.9% in October last year. (Graph 2.0)


-30

-20

-10

0

10

20

30

Sep-

10Ja

n-11

May

-11

Sep-

11Ja

n-12

May

-12

Sep-

12Ja

n-13

May

-13

Sep-

13

Jan-

14M

ay-1

4Se

p-14

Jan-

15M

ay-1

5Se

p-15

% YoY

Industrial Production Retail Trade

-10

-5

0

5

10

15

20

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

Oct

-11

Feb-

12

Jun-

12

Oct

-12

Feb-

13

Jun-

13

Oct

-13

Feb-

14

Jun-

14

Oct

-14

Feb-

15

Jun-

15

Oct

-15

% YoY%

Base Effect(L) Inflation(R ) Food Prices(R )


-8

-7

-6

-5

-4

-3

-2

-1

0

1

Janu

ary

Febr

uary

Mar

ch

April

May

June July

Augu

st

Sept

embe

r

Octo

ber

Nove

mbe

r

Dece

mbe

r

% GDP

2011 2012 2013 2014 2015

00.5

11.5

22.5

33.5

44.5

5

May

-13

Jul-1

3

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

% GDP

Current Account Deficit


11


1.4 Carry Over Effect 1.5 Retail Sales & Real Wages

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

percentage points

Carry-over effect Growth within the yearReal GDP growth

-25-20-15-10

-505

10152025

Oct-0

8Ja

n-09

Apr-0

9Ju

l-09

Oct-0

9Ja

n-10

Apr-1

0Ju

l-10

Oct-1

0Ja

n-11

Apr-1

1Ju

l-11

Oct-1

1Ja

n-12

Apr-1

2Ju

l-12

Oct-1

2Ja

n-13

Apr-1

3Ju

l-13

Oct-1

3Ja

n-14

Apr-1

4Ju

l-14

Oct-1

4Ja

n-15

Apr-1

5Ju

l-15

Oct-1

5

% YoY

Retail Trade Wages 1.6 Public Debt 1.7 Foreign Claims

0

10

20

30

40

50

60

70

80

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Oct-1

5

% GDP

Public Debt

5

7

9

11

13

15

17

19

21

23

Sep-

08De

c-08

Mar

-09

Jun-

09Se

p-09

Dec-

09M

ar-1

0Ju

n-10

Sep-

10De

c-10

Mar

-11

Jun-

11Se

p-11

Dec-

11M

ar-1

2Ju

n-12

Sep-

12De

c-12

Mar

-13

Jun-

13Se

p-13

Dec-

13M

ar-1

4Ju

n-14

Sep-

14De

c-14

Mar

-15

% Serbia's GDP

Austrian Bank s Greek Banks Italian Banks

1.8 Central Bank Interventions in the Domestic FX Market & EUR/RSD

1.9 Capital Adequacy & NPLs

100

105

110

115

120

125

-300

-200

-100

0

100

200

300

400

500

Apr-1

2Ju

l-12

Oct-1

2Ja

n-13

Apr-1

3Ju

l-13

Oct-1

3Ja

n-14

Apr-1

4Ju

l-14

Oct-1

4Ja

n-15

Apr-1

5Ju

l-15

Oct-1

5

EUR mn.

NBS Interventions i n the FX Market(R ) FX Rate EUR/RSD(R )

Sell EUR mn.Buy EUR mn.

12

14

16

18

20

22

24

15

15.5

16

16.5

17

17.5

18

18.5

19

19.5

Q1 2

010

Q2 2

010

Q3 2

010

Q4 2

010

Q1 2

011

Q2 2

011

Q3 2

011

Q4 2

011

Q1 2

012

Q2 2

012

Q3 2

012

Q4 2

012

Q1 2

013

Q2 2

013

Q3 2

013

Q4 2

013

Q1 2

014

Q2 2

014

Q3 2

014

Q4 2

014

Q1 2

015

Q2 2

015

Q3 2

015

Capital Adequacy Ratio(L) NPL % total loans(R ) 2.0 Private Sector Deposits & Credit 2.1 Monetary Conditions Index (MCI)

-10

-5

0

5

10

15

20

25

30

Oct-1

0Fe

b-11

Jun-

11Oc

t-11

Feb-

12Ju

n-12

Oct-1

2Fe

b-13

Jun-

13Oc

t-13

Feb-

14Ju

n-14

Oct-1

4Fe

b-15

Jun-

15Oc

t-15

% YoY

Deposits Credit

-8

-6

-4

-2

0

2

4

Oct-1

1Ja

n-12

Apr-1

2Ju

l-12

Oct-1

2Ja

n-13

Apr-1

3Ju

l-13

Oct-1

3Ja

n-14

Apr-1

4Ju

l-14

Oct-1

4Ja

n-15

Apr-1

5Ju

l-15

Oct-1

5

Nomi nal Effectiv e Exchange Rate

Interest rate

MCI

Note: The index is a weighted average of the annual change in policy rate (60% weight) and the nominal weighted fx rate (Nominal Effective Exchange Rate).

Tight MCEasing MC

Source: Piraeus Bank Research, Datastream, National Sources, BIS

12


Economic Research & Investment Strategy Lekkos Ilias Chief Economist +30210 3288120 [email protected]

Greek Economy Staggel Irini Manager +30216 3004495 [email protected]

Aggelopoulou Anastasia Economist +30216 3004488 [email protected]

Gavalas Dimitrios Junior Economic Analyst +30216 3004484 [email protected]

Developed Economies Patikis Vasileios Head +30210 3739178 [email protected]

Polychronopoulos Dionysis Senior Economist +30216 3004493 [email protected]

Arakelian Veni Senior Economist +30216 3004492 [email protected]

Papakostas Chrysovalantis Economic Analyst +30216 3004491 [email protected]

Konstantoy Evangelia Junior Economic Analyst +30216 3004486 [email protected]

Developing Economies Rotsika Dimitria Economist +30216 3004494 [email protected]

Giannakidis Charilaos Junior Economic Analyst +30216 3004485 [email protected]

Sectoral Studies Vlachou Paraskevi Economic Analyst +30216 3004483 [email protected]

Institutional & Regulatory Developments Leventakis Artemis Senior Economist +30216 3004487 [email protected]

Margariti Konstantina Junior Economic Analyst +30216 3004489 [email protected]

Secretary Papioti Evaggelia Secretary +30210 3288187 [email protected] Disclaimer: This note constitute an investment advertisement, is intended solely for information purposes and it cannot in any way be considered investment advice, offer or recommendation to enter into any transaction. The information included in this note may not be construed as suitable investment for the holder, nor may it be considered as an instrument to accomplish specific investment goals or relevant financial needs of the holder and may neither be reckoned as a substitute to relevant contractual agreements between the Bank and the holder. Before entering into any transaction each individual investor should evaluate the information contained in this note and not base his/her decision solely on the information provided. This note cannot be considered investment research and consequently it was not compiled by Piraeus Bank according to the requirements of the law that are intended to ensure independence in the sector of investment research. Information comprised in this note is based on publically available sources that are considered to be reliable. Piraeus Bank cannot be held accountable for the accuracy or completeness of the information contained in this note. Views and estimates brought forward in this note represent domestic and international market trends on the date indicated in the note and they are subject to alteration without previous warning. Piraeus Bank may also include in this note investment research done by third parties. This information is not modified in any way, consequently the Bank cannot be held accountable for the content. The Piraeus Bank Group is and organization with a considerable domestic and international presence, and provides a great variety of investment services. In cases where conflicts of interest issues should arise while Piraeus Bank or the rest of the companies of the group provide investment services in relation to the information provided in this note, Piraeus Bank and the companies of the Group should be underlined that (the list is not exhaustive): a) No restrictions apply in dealing for own account, or with regards to trading in relation to portfolios managed by Piraeus Bank or companies of its group before the publication of this note, or with regards to trading before an initial public offer. b) It is possible that investment or additional services are provided to the issuers included in this note against a fee. c) It is possible that Bank or any of its subsidiaries participate in the share capital of any of the issuers included in this note or may attract other interests financial or not from them. d) The Bank or any of its subsidiaries may act a market maker or an underwriter for any of the issuers included in the note. e) Piraeus Bank may have issued similar notes with different or incompatible content with the content of this note. It should be explicitly noted that: a) Figures refer to past performances and past performances do not constitute a safe indication for future performances. b) Figures constitute simulation of past performances and they are not a safe indication of future performances. c) Any projections or other estimates are not safe indications for future performances. d) Taxation treatment of information provided in this note may differ according to the rules that govern each individual investor. Therefore the holder should seek independent advice in relation to taxation rules that may affect him/her. e) Piraeus Bank is not under any obligation to keep data and information provided herein updated.

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