Banca Transilvania could consider entering the market of the Republic of Moldova as an expansion option with a view to continuing growth in 2008, says Horia Ciorcila, chairman of the bank's Board of Directors.
"We will have to decide on how to further develop by the end of 2008 or early 2009. An option would be to expand outside, to Moldova," Ciorcila told ZF.
He says BT is now faced with a "big dilemma" about how growth will continue after the end of 2008, when the current expansion plan ends.
"At the end of 2008, we will have a large territorial network, a substantial client portfolio and a solid financial group structure. We need to look at what to do next."
Ciorcila believes BT could develop as a regional player, but believes buying a bank in a neighbouring country, like Ukraine, would be too expensive. "We could consider maybe the Cernauti area, where there is a significant community of Romanians." At the same time he does not believe buying a local player like Banca Carpatica (with a below 1% market share) would be the solution.
The idea of entering Moldova also has the support of Roberto Marzanati, deputy chairman of the Board of Directors and representative of EBRD, the majority shareholder of the bank.
"BT can have a regional dimension, and Moldova is a solution within reach. Under the umbrella of EBRD, even some political issues, which such a step might involve, could be addressed," Marzanati said.
He says EBRD will remain a shareholder in Banca Transilvania: " for as long as it is necessary, because this is a success story for us."
"We do not necessarily have to opt for the traditional approach of 'we've got a bank, who offers more for it?', because BT is growing so fast that other solutions come up. Many investment funds and insurance companies are interested in long-term stakes, while share swaps could also be considered. Last but not least, the capital market is turning out to be a good source of funding; there is enough money in Romania," states Marzanati.
He believes BT has the long-term capacity to withstand competition from players that are backed by powerful parent banks. "So far, it appears the bank can grow without a parent bank. The sources for growth have not run out and the bank is under no pressure to be sold."
Ciorcila believes BT could even challenge Raiffeisen's position, given its extensive territorial network, growth rate and client-base, yet things become complicated when it comes to financing sources, as Raiffeisen has easier access to such sources, because of its Austria-based parent bank. Banca Transilvania needs to increase its share capital periodically to support growth.
"I sometimes regret that we do not have enough resources to sustain the growth we could achieve. We don't want to grow foolishly, either," says Ciorcila.
He adds the money collected from the sale of BT Asigurari will be used to finance the organic growth of the bank. On Friday, BT officially confirmed the "exclusive" talks carried out with the French at Groupama, the third-largest insurer in France.
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