Big banks march towards Romania

Overall, seven foreign banks have notified the central bank of their intention to carry out several activities permitted by European regulations directly on the Romanian market, said the head of the supervision department of the central bank, Nicolae Cinteza.
The seven banks expected in Romania are JP Morgan International Bank Limited, JP Morgan Europe Limited, Citibank International Plc, The Royal Bank of Scotland, Erste Bank, Lombard Odier Darier Hentsch Private Bank Limited and Credit Suisse Luxembourg.
“Some of these banks will handle a vast array of activities. They will attract deposits, but also offer loans, do leasing operations, consultancy and operations with derivatives,” said Cinteza.
Banks submitting notification will sell their products directly to local clients, but without opening an office, in which case they would have had to abide by the central bank's monetary policy rules.
“The banks that are already present in Romania will probably start selling by use of a mandate from their local office,” said Cinteza, referring to Erste Bank, which is the majority owner of Banca Comerciala Romana, and Citibank, which now operates locally through Citibank Romania.
Local bankers interviewed by Business Review have opposing views on whether there is still room for big foreign players on the market.
Banca Romana pentru Dezvoltare-Societe Generale president Patrick Gelin said SocGen would not attempt an entrance on the market now if they were not already present in Romania. “We think that in this market, if you do not have a 4 or 5 percent market share, you do not count. It is very expensive and to make all these investments profitable takes time. If they had 15 or 20 years available, maybe, but I don't think that this is the case,” Gelin previously told BR.
But ING Bank general manager Misu Negritoiu said Romania was still under-banked when it comes to individual customers.
“The financial intermediation in the Romanian economy is below 30 percent, while in other countries in Europe it is at 50-60 percent. The number of products, particularly in lending, is also still low and the banks have seen the opportunities. There is enough room for everybody. Eventually, this will lead to a balanced offer for the Romanian customers and the market will become competitive in pricing, information and products,” said Negritoiu.
Some of the banks that have announced their presence will engage in private banking. However, ING Bank, a local leader in this area, has recently announced it will become more market-oriented and increasingly tackle the retail sector.
“As has been the case in other more mature markets, as a niche bank you cannot last too long. Looking to all the other countries, with the exception of a few local players, it has become obvious that any bank has to do it all,” Negritoiu told BR.

Ana-Maria David