Leumi Bank digs into its private banking business

Bank Leumi Romania, the fully-owned subsidiary of Israeli-based Leumi group and one of the few banks that reported growth in first half, said it planned to expand its private banking activities, but without overlooking its other business lines. Laurentiu Mitrache, chief executive of Bank Leumi told Wall-Street the main points of focus of the bank’s activity.
Local private banking market is in its infancy, but has potential

Bank Leumi Romania is currently running a program which serves as a vehicle for the development of its private banking line, Laurentiu Mitrache (photo) chief executive of the bank told Wall-Street.

“We will not focus on the retail line, due to our limited network that wouldn’t allow us to reach a loan book that could cover the costs of this activity. Therefore, we are focusing our retail business on high-income persons”, said the head of Leumi Bank Romania.

The parent bank of the local credit institution, Bank Leumi Israel is one of the international banks best known for its private banking services.

“There is no secret that the local private banking market is still in its infancy and has potential. But it’s an activity that requires Swiss-like planning beforehand, and this is what we aim for”, said Laurentiu Mitrache adding that “our high-income retail clients are those who we see as potential private banking clients”.

Almost a quarter of the 44 banks present in the local market have launched private banking services: BCR, BRD, Raiffeisen, ING, UniCredit Tiriac, Bancpost, Millennium Bank, RBS, MKB Romexterra, OTP, Credit Europe Bank and Volksbank.

Banks have two offers for deposits: one with high yields and one with low yields

Bank Leumi Romania has taken steps to draw funding from clients. The bank has recently launched multiple-withdrawal deposit with yields up to 9.75% for lei and 3.65% for euros.

“Same as other banks, we try to stimulate saving among population, and at a macroeconomic level, it can be seen an increase in population savings”, said the chief executive of Leumi subsidiary.

Even though banks have significantly reduced deposit interests, they remained extremely attractive as other alternative investment opportunities don’t provide similar returns.

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