The medium-term objective indicated by Andreas Treichl, CEO of Austrian Erste Group, is a return to sustainable return on equity of at least 15-20% after in 2011 the ROE, according to International Financial Reporting Standards, collapsed to 1%.
After BCR ended 2011 with a net loss of over half a billion lei (around EUR120 million), according to Romanian accounting standards, the Austrian group decided at the beginning of this year to make significant changes in the management team.
Erste head believes that Spurny’s team is very strong and has high expectations, saying he is impressed by the personality of BCR’s new CEO and by his compatibility with the local market. This is the first time that Spurny works for the Erste group, being recruited from the Hungarian subsidiary of Italy’s Intesa specifically to helm BCR. He also has experience on the Slovak and Czech markets.
The new CEO takes over at a time when the bank sits comfortably in terms of nominal market shares, both in terms of loans and in terms of deposit, but with many vulnerabilities in terms of the portfolio of liabilities. In fact, considering that more than one fifth of loans in BCR’s balance sheet are rated as non-performing loans, a prospective cleaning up of the portfolio would also mean a substantial adjustment of its market share on lending and on assets in general.
In his bid to help BCR rebound, Treichl also threw Martin Skopek into the game. He had to step down as member of the group’s executive board in Vienna to return to BCR as vicepresident in charge of retail.
Skopek is set to re-evaluate the BCR network and adjust it to the new market conditions, which could also mean subsidiaries closing down. Another important objective of his mandate will be to encourage lending in Romanian currency, with euro-denominated financing to be limited to the First home program and to clients that earn in foreign currency.
For the new division of treasury, capital markets & group large corporates, which Romanian Sergiu Manea has been put in charge of, a major stake is to boost fee-related income through diversification and by boosting the degree of sophistication of services offered by BCR on this market segment.
(English version by Daniela Stoican)