The bank will act as a universal bank, having a fully-fledged range of services and products and a well developed distribution network, but more specifically will address three main business segments: medium and large companies, retail banking and consumer finance. Smaller enterprises will also be included in Millennium's strategy.
“The corporate business unit will comprise also SMEs and small businesses. SMEs are definitely one of our target sectors, as that will be the fastest developing area in the market,” said Toscano.
He did not specify which of the bank's three main business segments is expected to weigh more in its revenue charts in the first year of activity.
“Revenues will be balanced. The reason why we are touching the three segments, corporate, retail and consumer lending, is because we think all these segments have potential,” said the GM.
On the consumer finance segment, Millennium bcp is preparing to launch a product that will feature ground-breaking characteristics.
“We will launch a consumer product that is not similar to any existing one so far, which has innovative features and will attract customers. The nature of the product that we are offering will be announced very soon.”
However, not all of Millennium bcp's products that are successful in other markets will be implemented heavily. In Poland, the bank is the market leader in mortgages, for instance, but is in no hurry to re-enact that success locally.”We would very much like to be a leader in every segment of the local market, and we are ready to offer mortgage products to our customers. However, the market is small at present,” said Toscano.
“It will grow dramatically in the next few years and we want to be a player on that segment as well. We have experience in Poland, where we are market leaders, in Greece and in Portugal, where we are market leaders on almost every segment. The mortgage area is definitely in our plans and we are actually ready to serve this line of business already,” he added.
The bank opened its first 39 branches last week: 30 of them are credit centers for consumer finance customers, 11 are full-service financial centers and one unit serves private banking customers. The GM announced the bank's intentions to open 60 more branches by the end of 2009.
So far, the bank is present in nine of the main cities in the country: Bucharest, Bacau, Brasov, Cluj, Constanta, Iasi, Oradea, Ploiesti and Timisoara.
The number of employees is about 500, only five of whom are Portuguese. This is consistent with the group's strategy of being a multi-domestic lender, therefore “a Romanian in Romania,” according to Filipe de Jesus Pinhal, chairman of Millennium bcp.
With regards to investments, the bank initially invested up to about EUR 40 million in Romania, Toscano said, but the sum will grow to EUR 45 million next year and go over EUR 76 million in 2009 and over EUR 79 million in 2010. By 2011 total investments will reach EUR 300 million.
Millenium bcp first became known to Romanians roughly two years ago, when it decided to become involved in the bidding for the privatization of Banca Comerciala Romana. The bank lost the deal to bigger, better Erste Bank and set off on a venture that some bankers described as risky and something they would not do.
“I am skeptical, I do not know what they will do, but what I can say is that never again would SocGen do the same,” said the president of BRD-SocGen Patrick Gelin when Millennium bcp first announced serious intentions of tapping the Romanian market.
“If we were not already in Romania, we would certainly not do the same as Millennium. We think that in this market, if you do not have a 4 or 5 percent market share, you do not count. To make all the investments profitable, it takes time. If they had 15 or 20 years available, maybe, but I don't think that this is the case. It is difficult to have a good level of profitability in two, three years with these kinds of investments,” said Gelin.
However, the Millennium bcp officials said they were content with the decision they made, optimistic about the future and not keen on growing more through an acquisition.
“Nothing is ruled out, but we have no intention of making any acquisitions on the local market at this point and have not studied any of the banks up for sale,” said Christopher de Beck, vice-president of the Millennium bcp Administration Council. De Beck also ruled out any short-term acquisitions on other European markets.
“We have a lot to do in the territories where we are today. It would not make sense to start looking at other markets while we have not fully exploited the ones where we are now,” he said.
However, if the right opportunity came along, Millennium bcp would consider having a share in it – with one condition. “As a rule, we always have the majority of operations, meaning at least 51 percent of the shares,” said De Beck.