BR’s strategy for 2009
For 2009, Banca Romaneasca will put its odds on a moderate asset growth, at 15% from prior year. Moreover, the regional expansion will slow down compared to previous years.
Banca Romaneasca is now holding a 150 retail units network, and plans to open only 3 branches this year, that currently are in different completion stages. Depending on the further evolution of the market, the bank will revise its expansion strategy, Maragkoudakis explained.
National Bank of Greece will make public the consolidated financial results tomorrow, March 17.
At the end of last year, Banca Romaneasca had expected a 23-mln euro profit, 45% above the initial forecasts. Banca Romaneasca’s staff counts 1.686, and has no plans of layoff.
National Bank of Greece (NBG) group ranks ninth in terms of loan-to-deposit ratio in Europe, being one of the few banks where the deposit level exceeds the loan volume.
NBG is ranked seventh in Europe in terms of capital adequacy (tier 1 and 2 ratio).
Odds on European funds
“I am not saying that Romanian financial system is going through a crisis, but given the gloomy international climate, the financial institutions are affected. There are liquidity problems in the banking sector, but this is why the deposit interests are now at this high level. Banks are trying to cover the cash drought”, Andreas Maragkoudakis said in an interview to Wall-Street.
If lending was the engine of the economy, now the main drivers of economic growth will be the funds from European community.
“The most important ones right now are the EU funds that can finance projects/ investment programs in companies, but especially in infrastructure. At this point, we are not involved in any joint-funding project in this direction but we are examining the possibility,” Maragkoudakis pointed out.
Nevertheless, the CEO of Banca Romaneasca is skeptical when it comes to lending, adding that the international economic climate is not favorable to revive lending.
“Banks in many countries slowed lending for two reasons: there is a cash problem, they don’t hold the required funds, and those existing come at a high cost. Then, there is an increase of defaults, which makes bankers spend their nights toiling over with their clients’ inability to pay rates. Therefore, all these factors make me more optimistic regarding the revival of lending to the level before international financial crisis”, said Maragkoudakis.
The leader of Banca Romaneasca said the loan level before crisis’ ‘outbreak’ was “probably too high”.
At the same time, an amelioration of international economic climate is less likely. “As we see, US Government is paying loads of money, but money only is not enough. If there is no confidence in institutions and comprehensive programs to weather crisis, I don’t think the problems will be solved anytime soon”, Maragkoudakis added.
BNR’s regulations and expectations of BR’s CEO
Although all lenders would prefer the BNR to cut the required reserve ratio, the head of Banca Romaneasca says this is not supportable in the current local context.
“BNR might be concerned on the after-effects of these measures. The cash could return back to the lenders’ parent banks. We have to say that Banca Romaneasca has a different approach”, Maragkoudakis, said.
“If there is any improvement signs in the economy, BNR will probably reduce the required reserve ratio, which will obviously lift the lending pace in Romania”, Maragkoudakis
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