After three years of crisis during which banks had mostly stalled for time waiting for the economic rebound promised by politicians or some analysts every six months to happen, the shareholders of several major lenders reached the conclusion that they need a new management style.
This has led to the unprecedented situation in which three institutions, at the top of the ranking of banks by assets, BCR, BRD and Banca Transilvania are about the replace their chief executive officers. Only such a process does not happen overnight and beyond recruiting the new CEOs, they need to be confirmed for the position by the central bank (BNR), which may take several months.
Whatever people might say, a time of transition at the top of a large bank can affect the business especially when the entire market is looking for a direction and waiting for signals from leaders.
In the case of BCR, the largest bank on the market, the passing of the baton from Brit Dominic Bruynseels appointed in 2008 to Czech-born Tomas Spurny, 46, was announced for April 1, 2012. It remains to be seen whether the banker BCR’s owner Erste chose to drive its business up will be conformed by the central bank by that time.
BRD, the second-largest lender, has not announced a date when Alexandre Maymat should take over the CEO position from Guy Poupet, appointed in 2010, yet, but the two are already working together to ensure as smooth a transfer as possible. The transfer might be completed this summer, considering Maymat has just started the necessary steps to receive confirmation from the central bank.
An important test for the expats coming to run banks in Romania is knowledge of the local legislation.
Banca Transilvania, a bank mainly owned by local shareholders, is still in the interim CEO phase, a position filled by the European Bank for Reconstruction and Development representative Peter Franklin. The surprising departure of the former CEO Robert Rekkers caught the shareholders without a replacement trained so that Franklin took over as interim CEO on February 1. There is no information available about a process to recruit a replacement for Rekkers yet.
Then there is also Raiffeisen Bank, where the first vice-president term of Marinel Burduja is to end this summer and it remains to be seen what the parties will decide after a ten-year working relationship. Burduja, one of the most experienced Romanian bankers, is known as being the man who built Raiffeisen’s solid position on the corporate banking segment.
An important clarification was expected to come as a result of the merger of Greek Alpha Bank and Eurobank groups, the latter of which is Bancpost’s majority shareholder. The central bank was very pleased with the two banks’ consolidation prospects and with the signal of market concentration that such a deal would have sent. Meanwhile, Alpha changed its mind and Eurobank remained the only one that still wants this merger to happen.
It remains to be seen what consequences this will have on the local market and the heaviest pressure can be expected to be on getting the necessary funding. Alpha Bank and Bancpost have been paying interests above the market average for three years now in order to attract deposits, and this cost shows in their financial results.
The seventh bank by assets, with a market share a little higher than the system average of 5%, but backed by a institution kept alive the Austrian government that rescued it last month for the third time in a row, Volksbank Romania, was left out of the deal between the Austrians and the Russians at Sberbank.
One of the reasons why it was left out is that it had developed into a loan sale structure over almost ten years that was also entirely driven by foreign support and now lacks the necessary resources to be autonomous.
A very important activity for the bank now is to restructure and recover loans, for which a reason a position of executive vide-president was created in its board precisely for this purpose. A rebound is all the more difficult considering the significant losses of the bank, which amounted to 635 million lei (EUR145 million) by Romanian accounting standards last year. (EUR1=4.3754)
(English version by Loredana Fratila-Cristescu)