Romanian companies continue to feel the absence of a state-owned bank to compensate for the way the foreign banks conduct their business, as they are suffocating many customers, merely settle for rating loans as non-performing and then move to debt enforcement, says Nicolae Danila, currently a member of central bank’s board.
“There are lots of corporate loans rated as non-performing, which could be resuscitated if foreign banks really wanted to make an effort toward this goal. A powerful state-owned bank would be interested in an involvement on this market.”
Pressured by foreign shareholders to drop risky exposures quickly and faced with more difficult access to money, many banks started cutting lines of credit for a number of clients in 2009, and access to new loans became more difficult especially for small and medium-sized companies. The trend continued, even though major banks report higher volumes of corporate loans.
The banks are actually fighting over a low number of corporate clients, many of them multinational subsidiaries, a group of local companies that managed to keep their leading positions and several state-run companies, mainly from the energy industry.
Danila, who had run BCR for seven years, most of which before privatization at the hands of Erste, and became a member of BNR’s board of directors, continues to believe that Romania is at a disadvantage in facing the crisis because the government no longer has a significant say on the banking market as it does in Poland and Hungary.
“Maybe someone will eventually admit that the manner in which Poland and even Hungary are going through this prolonged period of turmoil has to do with the government’s position in the banking system. Does it really not matter that the government controls the largest banking group in Poland, that the government still has an interest in the largest bank in Hungary?”
Sebastian Vladescu, former finance minister and the man who supervised the privatization of BCR, says that the idea that governments could do something to overcome the crisis if they were owners in the economy is an illusion.
“Even if we had a large state-owned bank, I don’t think we would have any reason to rejoice. BCR couldn’t have done anything without the many billions of euros from Erste. Where would it have got funding had it been a state-owned bank? From what market? How would the government have provided support to it?”
He uses the situation of CEC Bank as an example, where the government turns out to be incapable of increasing its share capital to consolidate its position and competitive strength on the market.
(English version by Loredana Fratila-Cristescu)