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 Romania
the awakening giant of Europe |
Read our exclusive interview.
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 ROMANIAN SAVINGS BANK
Manager:
Mr. Petrovici, President of Romanian Savings Bank ( CEC )
Contact:
CASA DE ECONOMII SI CONSEMNATIUNI
Bucuresti, Caela Victorei nr 13 - Sectorul 13
| Phone : |
(40) 1 310 43 43
(40) 1 312 34 65
(40) 1 311 11 19 |
| Fax : |
(40) 1 312 31 59
(40) 1 312 64 40 |
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This Palace, whose fondation stone was laid a century ago, is home to the oldest and most popular savings bank in Romanian history. Opening its doors to all citizens, it is the people`s bank with 12 million depositors - half the country`s population, and more than 2100
branches.
C.E.C.
The Romanian Savings Bank
Established at 1864
Calea Victoriei 13,Bucharest, Romania
email cec_cen@ bx.logicnet. ro
Company
profile
 Activities
Financial institution.
Strategy
Interview with
Mr. Petrovici,
President of Romanian Savings Bank ( CEC )
Question: Mr. Petrovici, your bank is 133 years old. Could you give to our readers a brief historical background of your institution, as well as your own professional experience?
Answer: As you already said, our bank is the oldest bank in Romania. It was established in 1864 by a decree signed by Alexandru Ioan Cuza, 16 years before the setup of the National Bank of Romania. In these 16 years we played the role of a central bank. CEC developed according to the economical, social and political environment in Romania, being in its entire history one of the largest banks operating on the Romanian market. Our bank has been addressing especially to the small and medium customers, but we never neglected the bigger customers, both individuals and companies. The collected funds were given as loans to the state, to the local communities and to the different sized business people. So, our bank was an universal bank. this evolution of CEC was stopped in 1948, when the Romanian banking system was reorganized, like it happened in all the countries in Central and Eastern Europe which were under a communist regime, after the soviet model. CEC was put in the monopoly situation to collect the money from individuals, as it happened to all the other banks, which had monopoly in their sector. The deposits that we collected were used for credits for the population to buy houses, under the communist slogan of supporting the population to build their own houses. The biggest part of these funds were deposited to the National Bank, from where they were being directed to different sectors, according to the unique national plan of development. After 1990 it began the restructuring of the banking system, to put away the effects of the communist regime. Unfortunately, at our bank, these reorganization efforts became concrete only in 1996, when a law for the organization and functioning of CEC appeared.
Q: What is your position within the Romanian banking system?
A: From the 1996 balance sheets we were on the fifth place from the assets point of view and from the nominal share capital and number of branches points of view we were on the first place. After the results obtained in 1997, we stepped up to the third place from the assets point of view and we remained the first in what concerns the nominal share capital and the network. We have over 2100 branches and all the other commercial banks that are operating on the Romanian market have together only 1200 units. So, without talking about our tradition, we also have this big number of branches, one of our biggest advantages. Now, we want to state very clear our place in the Romanian banking system and in this respect we promoted a new law project which was adopted by the Senate and I hope that this week it will be also discussed in the Chamber of Deputies. The main guidelines of this new law are that we want to make use of our tradition and to maintain the state guarantees for the individuals’ deposits.
We also want to state very clear our activities and, besides the savings accounts, we intend to open current accounts for individuals and companies, both in Lei and in foreign currency. We will continue to give loans to the population for house building and home improvements, but we will also begin to give credits for other things. Another activity that we want to begin is to give credits to the small and medium size companies, keeping in mind the need for the development of the middle class. We also intend to give credits to the public administrations, both central and local, to continue to make investments on the banking market and to participate with capital to different commercial and financial societies. These are the activities that we want to develop in the following years to have also active operations besides the passive ones.
Q: So, CEC Bank will become an universal bank, with a wide range of services, and I’m also thinking about your membership with VISA and EUROPAY. Could you give us where are the main guidelines concerning this membership?
A: Last year we became VISA and EUROPAY members. At the present time we are preparing our employees together with those two societies. Strategically, we already know what we have to do, but from the tactical point of view we have to implement our targets and I hope that until the end of this year we will be present on the Romanian market with this type of services. This Wednesday I’m invited to London to talk with the Board of VISA, to see their latest products, especially Smart Card, a product that they want to popularize, and to get to know the activity that VISA is developing in this region.
Q: What is your opinion about the Romanian banking system? which are its strengths and which are its weaknesses?
A: The Romanian banking system is a consolidating system. Besides
50 years of communist influence and organization, after 1990 this system suffered a bad influence from the past Governments. To consolidate the banks, the actual Government had to help two major state owned banks to cover the losses created by the inefficient credits given at the past Government’s disposals. In the same time, the Romanian banking system was affected by some mistakes, for instance credits without real guarantees, which lead to bankruptcy. The amounts given to the so called billionaires as credits were used to develop some inefficient activities, so the recovering of these amounts is not possible. But, starting with 1997, because of the measures taken and because of the management improvement, the Romanian banking system has an ascending trend, it got back the trust of the customers and I hope that this trust will consolidate in the following years. In the same time, the banking system is negatively influenced by the inflation. Because of this fact the interest is very high and the crediting activity is blocked. But, I’m convinced that after the macro-stabilization the Government will start the micro-stabilization and our economy will became a real market economy. this will lead to a decrease of the inflation and the crediting possibilities will grow.
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Q: Concerning the privatization of some state owned banks, is your bank a candidate for privatization?
A: No, and I will tell you why. For 133 years we have the state guarantee and this guarantee has a strong moral influence on the customers, because not even once in these 133 years this guarantee was used. After all the things that happened until now regarding the privatization process, to start now the privatization of CEC would create a lot of tensions among our customers and it would have a negative impact on them. As a proof to this, in the other countries around us, Hungary, Poland and the Czech Republic, the privatization of the state owned banks started a long time ago, for some banks it’s already finished, but the privatization of the savings banks started in
1990 and it’s not even close to be finalized. In Hungary, this process may end only in 2000-2001 and only if the state will keep the golden share. I consider that the privatization of some banks is good because this will lead to the existence of some strong private banks on the Romanian banking system. At the present time, five state owned banks, namely The Romanian Commercial Bank, The Romanian Development Bank, The Romanian Foreign Trade Bank, The Agricultural Bank and CEC, have 75% of the banking market. Through the privatization of BankPost, Agricultural Bank and Development Bank, strong private banks will appear on this market and this will lead to a more balanced system.
Q: You will become a member of VISA and EUROPAY international organizations. Do you have lots of relations with some foreign banks?
A: A major role in the developing of the banking system is held by three laws: the banking law, which was adopted by the Parliament, the law regarding the statute of the National Bank, which was adopted by the Chamber of Deputies and it’s discussed now in the Senate and the law the bank bankruptcy, which was also in the Senate now. These three laws are creating the legal framework of the banking system.
About your question, we are currently creating our relations with the foreign banks, because until last year we had only savings activities and the former management didn’t realized that we are living in a world with a lot of relations and we cannot remain outside these relations. That’s why we intend to have contacts so that when the law will be adopted we will only have to make real the relations. In this respect we had different contacts with Bank of America, CES Manhattan Bank.
Q: And what kind of relations do you have, for instance, with Bank of America, precisely?
A: Bank of America is interested in developing the house building and the roads building in Romania. Keeping in mind that Romania doesn’t have a developed infrastructure, this is really a big opportunity, besides the restructuring of the economy.
Q: Our readers are interested in new business opportunities. In which other areas of your activity are you interested to attract funds?
A: We are interested to attract partners in the house building area, a sector with big demands and a lot of possibilities. Another area is the developing of the small and medium size enterprises and the third one is infrastructure. these are the three biggest fields in which we are interested to have contacts with foreign banks and companies.
Q: As we say in the United States, contacts mean often contracts. What will you do to encourage greater contacts?
A: At the end of this month, me, a vice-president and a counselor, we will participate to an action initiated by Invest Romania. We expressed our will that, besides the scheduled program of this activity, we want to have personal discussions with the management of some big banks in the United States, to see the way they work, to get to know the American banking system, because this is the only way we can realize what we have to do to get to a certain level.
Q: Because you are playing a very important role in the Romanian economy, I would like to ask you another question. How confident are you for the future of Romania?
A: Personally, I’m very confident, because I consider that the only way to develop Romania is through democracy and a market economy. We cannot speak about development without these two things. I consider that, starting from what was good in Romania between the two wars, we can develop. I’m confident that if we continue on this track Romania will be a rich and prosper country, with people confident in the future and I’m convinced that there are the necessary resources for this.
Q: As a more personal issue, what has been you most satisfying personal achievement since you are being the President of The Romanian Savings Bank?
A: I’m the President of CEC for one year and I think that my most satisfying achievement was that I consolidated the population’s trust in CEC and this thing was reflected in our results for 1997. We have tripled the deposits balance, we have participated to a lot of activities regarding the labor force in Romania, we have paid the compensations to the miners and we didn’t have any conflicts and we have given almost 600 billion Lei loans for house buying. But, the most important fact is that the Romanians started to speak positively about CEC and we are no longer considered by the other banks as a partner that you can influence.
Q: As a final issue, what will be your final message to our readers?
A: As we use to do in Romania, we wish to your readers health, joy and to start from the idea that, no matter where they are, our bank will be for them the ideal business partner and we are expecting a part of them to become our customers.
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© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Romania
published in FORBES
Magazine's enriched with complementary information,
such as full interviews, detailed company files and more.
June 1 st 1998 issue
Developed by AgenciaE.Tv |
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