The market has become highly competitive on the segment of deposits, while on the segment of loan sales competition has lost momentum, explains Albert Roggemans, head of ING Bank's retail unit.
"On the lending segment, competition has eased up. The market had become dangerous and it was high time for realistic offers to return. NBR regulations are steering the market in the right direction," considers Roggemans.
He points out that the past six months have brought rising pressure on liquidity in the system, which has led to slowdowns on the lending, as well as deposit segment. "Foreign banks are more reluctant to send money to their Romanian subsidiaries due to the problems they are coping with on foreign markets," states Roggemans.
The trend was also reflected in the re-absorption of the traditional RON surplus of the interbank market, which has frozen interest rates above the level of the monetary policy rate in recent months, while banks pumped RON into customer loans.
ING has developed its retail services offer around a current account with a card attached, for which it pays an interest rate comparable to the levels usually paid for time deposits - 8.25% per annum. Whereas in past years the bank had a cash surplus from its retail business, now withdrawals have come to top deposited sums. In fact, cash withdrawals are outpacing deposits. However, the trend is also being registered as ING starts to "open" its Self'Bank-type retail branches to other banks' customers as well.
The bank now has a network of around 160 offices serving over 600,000 retail customers. However, the network is in full expansion and will reach 230-250 offices by late 2009.
Roggemans also says ING is trying to keep a "competitive" offer on the lending segment, as well. He says the bank has kept its market share at around 5% on the lending segment during the past year, and boasts a better position in the area of home equity loans.
Roggemans says ING has reached a thorough product and services offering, after having also launched a credit card in March. In the first phase, sales were oriented toward the bank's existing customers, but the bank will subsequently focus on luring new customers.
Also, ING has recently launched an offer aimed at small firms (with annual turnovers of less than 2m euros), which it serves through its retail network.
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