Profitability in the Romanian banking system will resume an upward trend this year, because, as the European Union accession nears, there will be increasingly more companies, foreign capital, investments, while the funds steered by the EU towards development will go through banks.
"The business growth, especially as far as infrastructure is concerned, is obvious. The closer we get to the EU accession, the more funds will become available and undoubtedly go through banks. The banking system will play an extremely important role for the entire duration. On the other hand, considering the banking intermediation level is still very low, there is growth potential and I am sure banks will focus on finding solutions to make use of this potential. The banking business will therefore grow and profitability will rise therefrom," Nicolae Danila, BCR president commented for Ziarul Financiar.
Last year was the first when profitably across the banking system visibly declined, with bankers blaming it on the drop in margins, the new regulations for making and ranking credits and provisions, as well as the much larger investments in keeping afloat on the market.
BCR's president argues his statements by mentioning the results of his bank in the first two months of the year. "The first two months of this year were outstanding and I don't think that was true only for us, but for almost every bank in the system. BCR's net income doubled from the same time last year. The main segments that contributed to the growth were precisely those that boomed last year: retail, small and medium-sized companies, real estate market and local authorities and municipalities market," Danila said.
He believes these will actually be the market niches to see banks clashing over from now on, as "things are more or less settled" on the corporate segment.
BCR's management targets a gross profit somewhere in the neighbourhood of 170m euros for this year, while investments should amount to more than 50m euros. "More than 20m euros will go to IT investments only," BCR chairman says.
BCR, the largest bank in the Romanian system last year logged $160m net profit, slightly lower than in 2002, but "in line with the expectations", as its officials say.
The strategy and business plan for 2004-2007 see BCR continuing to develop as an universal bank, dedicated to all client segments and an over 7% growth for the Group every year. oana.nuta@zf.ro
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