Guy Poupet, the bank’s chief executive says the market share fell precisely because the bank preserved its profitability and did not compete in terms of volume. The bank plans to stabilize its market share, which dropped to less than 14% and even increase it this year.
BRD will defend its market position via communication campaigns, after having kept a low profile for a while, Poupet says, adding it will be more active because competition is fierce and it has to defend its position.
BRD posted the highest profit on the market, of RON465 million (EUR107 million) in 2011.
This is the first time this year when a major bank announces a plan to consolidate its market share, as most of the competitors on this market have absorption of non-performing loan costs as their top priority.
On the other hand, BRD wants to stimulate savings market with new products and packages, grant mortgage loans and refinance consumer loans. The priorities of its corporate business are financing for European funds, energy, healthcare, environment and infrastructure.
The central bank (BNR) governor is well within his right to demand bankers to cut interests on loans, but banks operate on a market, and this market is not perfect, so that banks have to be profitable above all else, says Guy Poupet.
He is certain Isarescu was not joking when he told bankers to cut interests, even though he said it with a smile on his face. Still, Poupet says competition among banks for deposits cannot be overlooked and each bank has its own strategy.
A bank has to be profitable and keep a certain margin and it cannot compensate risk costs by anything else other than fees and interest margin, Poupet believes.
BRD’s boss says a cut in the minimum mandatory reserves would be more useful in putting pressure on loan interests.
The central bank’s board of directors will discuss the key rate and minimum reserve level during its meeting on March 29.
(English version by Loredana Frățilă-Cristescu)