Romania’s banking system will see M&A deals starting 2013, says UniCredit CEO

The chance of the banking system lays in consolidation and specialization of the financial system in Romania, according to Rasvan Radu, CEO of UniCredit Tiriac Bank.

Radu said he expects mergers and acquisitions of banks starting next year, as we currently have too many universal banks that are involved both in the retail and corporate segment.

“Those that want to sell are asking for big prices and there aren’t many buyers,” said Radu. “We could witness an acceleration of activity in this sector starting next year, as it takes times to prepare strategies,” he added.

The CEO said financial groups will enter or exit certain geographical areas and some will concentrate solely on domestic markets.

Net profit of UniCredit Tiriac Bank has decreased by 6.9 percent y/y to EUR 38 million in 2011.

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The lender’s assets increased by 9.9 percent to EUR 5.3 billion at-end 2011, while the loan volume gained 17.2 percent y/y to EUR 3.7 billion and to EUR 4.3 billion if external loans are taken into account.

Although consumer loans dropped 20 percent last year, corporate and SMEs lending rose by 20 percent and 33 percent. Mortgage loans increased by 21 percent last year.

UniCredit’s financing of EU projects increased five fold to EUR 360 million last year.

Radu said banks should become intermediary bodies on EU projects, accelerating terms on approval and payments. This move would also ease access to auxiliary financing.

This year, the lender plans to increase financing for EU projects, also seeking greater involvement in the absorption mechanism.

Ovidiu Posirca