Companies that are involved in trade account for the bulk of funding granted by large banks to the corporate sector, indicate the financial reports of BCR and of BRD-SocGen.
In the case of BCR, the biggest bank in the system in terms of assets, companies involved in trade accounted for 17% of credits and down payments granted to corporate entities. As for BRD-SocGen, one third of funding granted to corporate clients and to SMEs (small and medium-size enterprises) went to trade and tourism.
At the end of last year, BCR's credit portfolio reached around 35 billion RON (9.7 billion euros), up 47% on December 2006. Out of the overall funding, almost 45% went towards individuals.
At BRD-SocGen, individual clients accounted for 41.2% of a funding portfolio worth 24.94 billion RON (6.9 billion euros). Corporate clients accounted for 33.7% of the bank's credits, while SMEs were granted 25.1%. Therefore, in total, the two banks pumped almost 35 billion RON (9.7 billion euros) into corporate funding.
The structure of the funding portfolio granted by BCR and BRD to companies differs greatly. Although both banks concentrate the bulk of their funding on trade, other differences are apparent.
At BRD-SocGen, 17% of corporate credits were directed towards construction firms and the manufacturers of construction materials. Another 14% of the funding went to companies in the services sector, while suppliers of raw material and energy absorbed 7%.
The BCR was more inclined to grant credits to companies involved in agriculture and the food industry, which assimilated 14.5% of credits granted, compared with 9% at BRD. Next in line are public institutions, with 14%, after the BCR had been one of the top-ranking players in terms of funding for the municipalities over the last few years. In fact, the financial services division of the group (BCR Securities) handled the most municipal bond issuing sessions on the local market last year.
Construction companies only ranked fifth with a 7.5% share of funding granted by the BCR, after leasing and real estate transactions with 9.3%. The Erste Bank Group, the majority shareholder of the BCR, did in fact announce, as early as a few years ago, that it wants a stronger presence in the sector of real estate funding. On the other hand, French-based BRD-SocGen preferred to grant limited funding to the real estate market, after the bank feared potential unfavourable price evolutions. In fact, real estate funding accounted for a very small share of credits granted, while funding for real estate investments accounted for 13.5%, and the bulk - 85.8%, went into consumer loans.
Transport and communications companies attracted 5%, after chemical and petrochemical companies absorbed another 4% of BRD's corporate funding. As for the BCR, companies in the industry of metal products and the transport sector accounted for 4% each, while companies in the chemical industry accounted for 5.5%.
BCR & BRD corporate funding:
BCR: 20.3 billion RON (9.7 billion euros) in 2007
BRD's corporate credit portfolio: 14.5 billion RON (6.9 billion euros) in 2007
BCR: 17% to the trade sector, 14.5% to agriculture and the food industry, and 14% to public institutions
BRD: 33% to trade and tourism, 17% to construction firms and manufacturers of raw materials, and 14% to the services sector
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