The process of reforming systemically important banks hasn't been completed yet. The independence and credibility of the regulatory and supervisory bodies will be of crucial importance in the effort to reduce the systemic risk and moral hazard generated by such banks.
Digitalization remains a challenge for traditional banks and few of them are able to achieve success that translates into financial profits. Meanwhile, an entire class of digitally-native entities has entered the market.
Due to the introduction of the bank tax in Romania a big sell-off of shares of Romanian banks occurred in late 2018 and early 2019. There was also some controversy regarding not only the taxation of banks in itself, but also the structure of the new tax burden.
The Polish banking sector is feeling the pressure of rising personnel costs and costs related to IT investments. Burdens are growing while the rate of return on equity declines, thus the consolidation of the sector may accelerate.
Banks in Croatia doubled their pre-tax profits in the first nine months of 2018, according to Croatian National Bank (CNB). Crotain banking sector has the highest capital employed in the economy, around HRK60 bn.