Dominic Bruynseels, CEO of BCR, tells Business Review about the perspectives of the local banking system and emphasizes the main elements of BCR’s strategy, one of which is increasing lending to companies in 2011 by financing productive sectors.
How would you describe the Romanian banking market at the moment? Has the local banking system passed through the current economic crisis?
All banks have a responsibility to try to improve their customers’ trust in them. And there is no better way that people’s trust in an organization is shown than the fact that more people do more business with you. Customers and banks need to understand each other and their financial life together better. We need to know our customers better, to sell and serve them better, to offer them simple and accessible products meeting their needs and financial situation, more suitable savings options and, eventually, affordable financing solutions. I think we need a new business model for the country. We need to be a much less of a consumption driven economy and we need to produce things.
How do you see the current lending situation in Romania? Are there any signs of recovery for the lending process?
Lending will resume gradually as economy recovers. We should not expect the credit mania of before the crisis, though. People have adjusted their spending behavior and values. Companies need to restructure and focus on core competencies. The economy needs to rebuild itself on a more solid base. We would lend to any good business presenting a good business plan. We see a lot of opportunities in industry, the petro-chemical industry, agriculture, but we also see an acute need for Romanian businesses to restructure, divest non-core assets and focus on core activities.
We’ll grant special focus to supporting the economic recovery through funding municipalities and public sector investment projects, co-financing EU projects, making smart use of international financing facilities for financing SMEs (industry, tourism, services, and agriculture).
Overall, our target growth for this year will be less than five percent. That’s because we do not see demand returning in the first half of the year, but in the second part of it. But this is reliant on the government making some significant steps in its infrastructure program. Lots of tenders have been issued for the first part of the year – they need to be followed through and the projects need to start. It remains to be seen whether the government will be able to execute them.
What is the most dynamic segment of lending, to individuals or companies?
We increased our market share in corporate lending in 2010. We plan to increase lending to companies in 2011 by financing productive sectors. We prioritize co-financing EU projects, international financing programs, alternative schemes to facilitate access to financing (such as the guarantees issue: JEREMIE program). There is significant potential in industry, energy, IT and agriculture. We finance all good businesses viable on the longer term, but the economy needs to continue restructuring. Companies need to focus on their core business, divest and concentrate resources to be competitive.
How was 2010 for BCR in terms of financial performance?
We have the largest exposure to the real economy and we feel most the impact of the economic recession. 2010 was a very difficult year for our customers and therefore for BCR. As expected, the results were heavily impacted by the continuing difficult market conditions in Romania: the economy was subject to a significant austerity program and VAT rise – the effects of which are still being felt. We continue to provide support for our customers, to improve the way we serve them and operate our business.
What has been interesting through the crisis is that our market share has been growing in some areas like the First House program and the corporate segment. We command the largest retail client base in Romania. Our goal is to help them to be in control of their financial lives.
What is your strategy for 2011?
The market is small at the moment, but it is growing. So, the areas we are focusing on are: becoming the leading savings bank in the country, the leading corporate and investment bank in the country, the leading mortgage bank and a leader in the SME market as well. The area we’re focusing on on the corporate side would be more in the larger corporate area.
We increased our market share in 2010 and we believe we’ll lend more to customers in 2011. We support the economic recovery but the economy and banking market need to rebuild on solid ground. We are looking at schemes and policies to facilitate access to credit in a meaningful manner. We’re staying open for business, there are still significant opportunities and we are looking with great interest at infrastructure projects, co-financing EU funded projects, energy efficiency schemes, guarantee schemes for facilitating SME access to loans. In addition, we operate through 667 branches and our strategy remains to optimize the results from operating the current network.
CV Dominic Bruynseels
Dominic Bruynseels built his banking career by serving the prestigious Barclays Bank for 27 years, where he started as assistant manager in a Barclay’s branch in the City of London. In 1989 he joined the large corporate side. Subsequently, his experience was diversified by a new role in operational business and systems planning. In 1999 Bruynseels became CEO of Barclays Africa and the Middle East, responsible for 12 operations across the region. Since 2008, the banker has been CEO of BCR Romania. During his tenure, BCR has strengthened its leading position on the local banking market. Bruynseels holds a degree in Medieval History from Durham University and an MBA from Henley.