“2011 was the year of stabilization after in 2010 we went through the toughest stage of the restructuring process. We are happy about how the bank has been transformed, but things never stop,” Nicolae Surdu, general manager of Banca Carpatica, told ZF in an interview.
“We are still at a stage where we seek efficiency and are prepared for a new restructuring if this crisis becomes tougher and lending takes longer to revive because the only control you’ve got is over spending,” he added.
Carpatica, a small bank controlled by businessman Ilie Carabulea, is now preparing to return to profit after its losses fell six times in the first half, to 18.7 million lei, thanks to lower pressure on the loan portfolio, which had been strongly affected by late payments in the last two years.
The bank went through a tough reorganization last year, when its unprofitable branches were closed, a series of operations were outsourced and the bank parted with a quarter of its employees.
“We are quite close to meeting our budget target and the bank could post a slight profit this year. We expect higher loan sales in the fourth quarter and an increase in recovered provisions. Our strategy was to clean up the balance sheet as early as last year and then focus on sales,” Surdu said.
According to him, the volume of provisions that cover losses from non-performing loans set up in the first eight months of 2011 accounted for just 16% of the volume of provisions set up in the similar period of last year, and in the last two months the volume of provisions recouped was sufficiently high to cover newly set up provisions. Carpatica had ended last year with RON155 million (EUR35.9 million) in losses, after setting up EUR49 million in net provisions.
The bank’s return to profit depends, however, on how the crisis progresses, says the head of Carpatica, considering that a deepening of the crisis would slow down loan sales.
New loans granted to individuals went up 1.5 times in the first eight months against the volume of loans granted over the course of last year, while in the case of companies the monthly average is 45% higher than in the same period of 2010. Bank estimates indicate a doubling in the volume of new loans in 2011 against last year.
(English version by Daniela Stoican)