“I hope we will turn this evolution into a two-digit increase as soon as possible. It is clear BNR’s policy is paying off. Confidence is rising and we can feel a positive state of mind”.
Spurny maintains BCR is “more than ready” to tap this demand, both in capital and cash terms.
“Demand growth is equally distributed between unsecured consumer loans and mortgages. We created a market of lei retail lending after in the autumn of 2012 we decided to exit euro lending and we want to cement our position of lei mortgage champion”.
BCR head also expects rising volumes on the basis of the new employee motivation system targeting the revival of the bank’s assets. In the past two years, BCR’s assets have slipped by EUR2.3 billion, to EUR14.9 billion.
Spurny also says BCR is also ready, in the back office area, to tap demand increases triggered by product promotion campaigns. “Since the start of the year we’ve been constantly among the top three-four interest offers for both secured and unsecured loans”.
Loan demand deicing is making BCR remember depositors after in 2013 the bank operated deep interest cuts for lei and foreign currency. “In 2013, we did not need cash, but as demand is picking up we will make reassessments as we want to offer clients fair interest rates”.
Along its corporate unit, BCR has as a top priority boosting operations with exporting companies and their suppliers. “We must make sure the bank is clearly positioned to work with the exporting industry. We are not as strong as we’d want in this area. Secondly, we want to strongly support infrastructure development projects”.
One of BCR’s ambitions in the corporate area is to strengthen its position as traditional bank for SMEs. BCR will also work with its parent bank, Erste, to fund projects it cannot absorb on its own.
In Romania, there are company owners with significant personal wealth who refuse to come up with the money to salvage their companies, states BCR head.
“It’s sad to sometimes see wealthy people unwilling to support their companies any longer though it’s in their power to save them. And it is very difficult to work with such clients amid the current legal environment”.
Spurny mentions several companies that regained their health on the basis of solutions discussed with the bank. “At present, we are negotiating a solution for a drilling equipment maker”.
As regards the possibility of BCR operating a debt/equity swap, Spurny states the mechanism is highly complicated in Romania because of regulations.
Jonathan Locke, the British banker who at the start of the year took over the position of risk executive vice-president, has the task of strengthening BCR’s risk culture. “It will be a project for the next two years, so that we may get to a deep understanding of risk management and of the way it can be translated into current business”.
Spurny says at this moment BCR knows its portfolio very well and bad loans are carefully categorized. BCR reported a bad loan rate of 29.2% for 2013 and a provision coverage degree of 65.8%.
To manage the NPL portfolio, BCR set up a specialized workout unit currently employing 480 people. “For this year we also have a highly ambitious target of solving a significant part of the NPL amount through a combination of strategies. The plan is under execution and I am quite confident we will be able to significantly cut the historic exposures, but at the same time I prefer to be cautious as we can see negative performances on some segments, particularly related to the insolvency of some state-owned companies”.
(English version by Catalina Apostoiu)