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 Romania
the awakening giant of Europe |
40 correspondent banks in U.S.A.
650 correspondent banks around the world
Nation-wide network : 233 branches and sub-branches
Your perfect guide and partner for investing
efficiently in Romania
Full range banking service
The bank you really need in Romania
 Company
profile
 Activities
Financial institution.
Strategy
Interview with
Mr. Ghica,
President of Romanian Commercial Bank,
Q: Mr. Ghica, your bank is a leader in your sector, it was the best Romanian bank in 1996 for Euromoney and the banker, but could you give to our readers a brief historical background of your bank, as well as your professional experience?
A: The bank is operating since 1990 by taking over the commercial transactions from the National Bank. This process of splitting our bank from the National Bank was the beginning of the banking reform in Romania. This way the National Bank became a real central bank, taking care of the central banking activities. We have taken all the balance sheet of the commercial activities and at that time 95 % of the balance sheet was representing shorterm loans granted to the Romania economy. The present bank cannot be compared with the bank from 1990, speaking from the quantitative and qualitative points of view. Today, in 1998, the structure of banking services and products is completely changed so you can identify less than 10% of what we were performing in 1990. All the products and services of the bank has been reviewed, adapted to the new conditions and challenges, the range of products has been enriched, all the products of the bank are backed by procedures and guidelines and what is very important is that the bank it’s very opened to the external markets, which was only a dream in 1990. From all points of view the bank consolidated itself and that’s why today the bank is having the leader position on the Romanian market. The own funds of the bank have been increased from 12 billion Lei in
1990 to 2000 billion Lei in 1998. The bank has a national network, it has quite an opening abroad, having 650 correspondent banks all over the world, it has more than 40 bilateral credit facilities from our counter to parties, the bank has syndicated credits, negotiated and engaged, it’s the first Romanian bank going on the international capital market with an issue of 75 million $, it’s the first bank having a special division for capital market which id dealing both domestically and abroad. The bank is very profitable one, the ratio profit on capital for 1997 (preliminary results) being higher than 1996
(60,10% ratio) as the BANKER'S Top 25. These achievements have been realized having a skilled and qualified personal and the permanent care of the bank is to improve constantly the qualification of the staff. In the country we have 3 training centers through which around 3000 people pass every year, but we are sending also an important part of our staff to be trained abroad. As a banking activity we focused on the corporate customers of our industry and we can say that 80 % of Romania’s industry is conducting the business through this bank. Of course, we are also opened to the other sectors and we have activities in agriculture, transport, trade. We have a good placement for the private sector which is increasing in the country and we are giving a special attention to support this sector for its development. We are addressing also to the private individuals and this year we intend to establish a special department for retail banking, so we can develop and put in a proper structure what we achieved so far. We built a strong branches and sub-branches network -over 230 units through out the country- which covers every town with more than 10,000 inhabitants.We are the first bank in Romania to have automatic debit machines in all the districts capitals of the country and our partners, VISA and Europay, are quite satisfied with the efforts that our bank did to introduce these services on the Romanian market. We have 5 debit cards and we will issue also a credit card by the end of this year or the next year, when we will work more with the private individuals. So due to our permanent efforts to improve the activity we have over 1,5 million customers both corporate and individuals.
As myself, I have 38 years banking activity experience, I worked in the National Bank of Romania since I graduated and it was a pleasure for me to have the mission to establish this bank, Banca Comerciala Romana, in 1990.
Q: What is your opinion on the Romanian banking system? Which are the strengths and the weaknesses?
A: I can say that the banking system in Romania had a positive dynamic, there are a lot of banks which have been seriously taking up this job of banking activity, not only state owned banks but also private ones. Of course, some banks had some malfunctions in their activities but this accidents are confirming the rule that the banks which are working with professionalism and addressing to the real economy have an important position on the market. I cannot say that the banking system in Romania is powerful, you cannot say that you have a strong banking system without a strong economy, but the beginnings are good.
Q: And how well does the Central Bank performs its role?
A: The Central Bank has been taking seriously its tasks and I can say that the reform on the banking system is a few steps ahead the reform on the real economy. The Central Bank created the necessary structures for the banking supervision in the country and in the last 2 or 3 years the things improved a lot especially because of the interventions of the National Bank. Talking about the monetary policy of the National Bank, I can say that we have one of the best economists working there. I speak highly about them, despite we are arguing a lot, all the time, in banking matters.
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Q: So, your government it’s implementing its privatization program, Banca Agricola, Romanian Development Bank and BankPost will be privatized, what about the privatization of your bank?
A: We are a hundred percent state owned bank and it’s very clear that, when the government will decide that this bank should become private, they can immediately say it, but we know that this bank is not yet included on the list. Perhaps this is an advantage, because the privatization process of a bank is quite a new process in the country, so we need to learn a lot of things. We could take advantage of the experience gained in privatizing other banks and it could be much easier for us. We need this experience because this bank is a large one in our system and it’s not very easy to privatize it. Our bank is more complex than the other ones, even if we talk only about the network of branches andthe wide range of the transaction.
Q: With this privatization, the other banks will maybe attract some powerful foreign banks. Which is your strategy to face this competition?
A: First of all, the competition is welcomed in Romania, because even now there is a small competition in the banking system and it is very good because the banks are challenged to improve their services and products. We are taking serious into account this aspect for the future and we know that foreign bank will come in Romania and they have another approach and mentality towards the customers.
Even now we are paying a lot of attention to the competition because we already have large foreign banks subsidiaries established in Romania and we know that there is an attraction for some of our customers to work with these banks. That’s why we have a special strategy for approaching and working with the customers and this strategy involves a long term relationship with them. we want to maintain these relations not only based on amiability but on economic basis. So, we are improving, enriching and enhancing our services and products, but in the same time we try to be one of the most competing banks regarding the prices, the costs and the bank charges. We also pay a great attention to our relationships with the banks from abroad, because through these relationships we can manage to attract additional resources which are necessary for importing high technology needed to improve the efficiency of our customers. So, we are aware of this competition and we do our best to compete fairly and to maintain our customers. We are creating new structures, in the headquarters and in the territory, to improve this relationship with our customers.
Q: What kind of relations do you have with those foreign banks, especially US banks?
A: First of all I can say that we have a good cooperation relation and I will give you some concrete examples. With CitiBank we have our main account where the turnover is a few billion $, we work with them since 1991 when we started our firsts transactions abroad. I think that they are satisfied with this relation because at least every three months we have a representative of CitiBank coming to Bucharest and we received also visits at higher levels. With American Express we have also a good relation and with the facilities they put at our disposal we can finance the shipping activities. We also work well with EximBank of USA, they accepted our bank both as a guaranter bank and a borrower, without governmental guarantees. So, I can say that the relations are very good and we always do our best to enhance the professionalism of our activities. These are only a few examples.
Q: As I said, you are one of the leaders in your sector, but I would like to ask you a more global question. How confident are you for the future of your country?
A: A bank is working in a real economy and I already said that a bank cannot be strong without a strong economy. But, I would like to tell you that, since I’m in the banking activity, my relations were very close with the real sector. I know the potential of the real sector and my opinion is that the things, maybe not this year or next year, but soon, will improve and we will go on the right track. Many companies have reconsidered their position towards the economy and the environment they work in, we have companies with plenty of firm delivery contracts, even more than they can cover this year. I know this because we have assisted and financed especially their export activities. Of course, there are still companies which are working on losses, which are not efficient, where the unions are quite strong and instead of having a professional management they have a union management. But, I have full confidence in the revised reform program announced last month by the government, I believe in some good economists, good specialists who are working on this program like Mr. Serbanescu, Mr. Daianu. The effects of the reform won’t be immediate, but they will appear. I was talking about the ship building yards; all of them are customers of our bank and all of them have commercial contracts until the year 2000, and beyond.
The things straighten up there and the results are obvious. There are also other sectors which eliminated the negative things in theirs activities and the results will be soon seen there. So, there are signs, obvious ones, and I’m optimistic about the future. The issue is how long it will take and what will be the costs.
Q: As a more personal issue, what have been your most satisfying personal achievement since you are being the president of BCR?
A: I have a satisfaction about which I never talked before. When we split from the National Bank of Romania, we took with us all the large companies which were working on losses and everybody was expecting us to fail. My satisfaction is that today we are leaders, we have about 40 % of the transactions on the inter-bank market, we are the most profitable romanian bank, we have very good people which are loyal to the bank and we are looked after by foreign banks and business men all around the world.
Q: As a final issue, what will be your final message to our readers?
A: To have confidence in Romania, not only because Romania is a beautiful country and a hospitable one, but it’s a country with good prospects, which can recover and come back among the countries with a solid economy.
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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
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