| Abstract [eng] |
Foreign Capital Banks Impact on the Banking Sector in Eastern and Central Europe The main purpose of this master thesis is to evaluate influence of foreign capital banks in the banking sector in Eastern and Central Europe. The work consists of three tasks: to analyse the scientific literature related to the influence of foreign capital in banking sector; to distinguish research methods and their properties; to perform market analysis of selected Central and Eastern European banking sectors. In this work methods such as the analysis of scientific literature and comparative methods will be used. For analysis of Eastern and Central Europe banking sector graphic analysis method, concentration measurements methods, non-parametric Data Envelopment Analysis (DEA) will be used. After literature analysis, we can sum up that the entry of foreign capital banks into the local market can lead to a better efficiency, profitability and overall competition. Foreign banks are considered as a source of stability, solvency and liquidity. The benefit of efficiency is associated with new technologies, products and management techniques. Some author’s claim that foreign banks entry improves the quality of financial services, boost overall economic and reduce financial weakness. However, foreign capital banks entry can lead to a negative aspect. Their sometimes can weaken the influence and importance of local banks, generate unfair competition in banking sector and can worsen financial shock of the local market by bringing international crisis to a weak developing local market. Used concentration methods showed, that for a past 10 years the banking sector in Eastern Europe is highly concentrated with huge concentration of foreign capital banks in lead. Chosen’s Central Europe banking sector countries showed slightly different results. In this particular region, concentration level is medium with dominance of foreign banks, except Polish and Slovenian banking sector where local banks are stronger in asset, loans and deposit aspects. Thus, hypothesis that foreign capital banks have great influence on banking concentration was confirmed for all Eastern European countries and for six Central European countries. Besides concentration, banking sector efficiency was also examined. Based on two assumptions (CRS and VRS) and five different models, was found out that Eastern European countries under CRS assumptions have average efficiency level dominated by foreign capital banks. The results obtained in Central Europe were mixed. The overall efficiency level was more average, but results for local and foreign banks were very similar. Meanwhile, VRS showed higher efficiency results for both regions. Low efficiency was sptted only for few local banks. In this case, hypothesis, that foreign capital banks have a positive effect on overall banking sector efficiency was confirmed for both regions. Suggestions are to minimise concentration and to maximese efficiency in few countries for better results. |
