Although Deutsche Bank is not expanding its banking business in Romania – for the time being at least, its outsourcing project is big news and marks the country’s transformation into a back office, call center and card processing services hub for major European banking groups.
Deutsche Bank, whose investment-banking arm is one of the favorite managers of the Romania’s Finance Ministry for its bond issues on international markets, studied several avenues for development of a local presence before the crisis. Shareholder support for its plans became harder and harder to get, though, due to the dramatic deterioration of the international finance-banking sector.
As a result it only kept a representative office in Bucharest in a building close to Piata Dorobanti in the center of the city, despite the Romanian government’s many attempts at persuading German banks to increase their business in this country.
This year, however, Deutsche Bank decided to take a big step when it began looking for an about 500 square meter space for its Romanian headquarters and for a 5,000 to 6,000 square meter space that can be expanded to 10,000 square meters later. Its project would require up to 600 people at first, for which it has already contacted recruitment agencies.
According to the information available on the real estate market, Deutsche Bank is looking at the City Gate towers in Piata Presei (northern Bucharest) and the West Gate business park (west of the city).
Several sources, however, say it actually settled for the UpGround complex in Pipera developed by Greek businessman Ioannis Papalekas and sold to RREEF, a real estate asset manager controlled by Deutsche Bank itself, in 2008-2009.
UpGround consists of two office buildings, BOB and BOC, and Deutsche Bank should move into a space in BOB, recently vacated by Austria’s Raiffeisen, which went to Sky Tower and Floreasca Office.
“Twelve tenants occupy space in the BOB building, with another tenant (an international financial institution) having agreed to lease approximately 10,000 square meters of office space in two tranches (June 2013 and June 2014),” reads the admission document prepared by Globalworth, a company founded by Papalekas, in view of admission to trading on the AIM market of the London Stock Exchange.
Papalekas remained a minority shareholder in UpGround.
According to information ZF got the “international financial institution” mentioned in the admission document is Deutsche Bank itself, but neither Papalekas, nor the local representatives of the institution provided any comment by the time the story was ready for posting.
“This is the most discreet search on the market I’ve ever seen,” says the manager of one of the real estate companies managing a significant amount of office space. “They came with a request for 5,000 to 6,000 square meters and looked at a lot of options but chose not to go with us,” the manager said.
Deutsche Bank wanted the services center space to be in a large building or in a multi-building business park to allow for expansion later. Rent in BOB Tower stands at EUR12 to EUR14 per square meter per month and office costs in Bucharest are among the lowest of all European capitals.
Deutsche Bank’s outsourcing project confirms Romania’s position as a hub that major European banks chose to transfer support services from finance and accounting to HR, back office, middle office, IT, call center and processing.
The largest banking outsourcing company in Romania is UniCredit Business Integrated Solutions (UBIS). Societe Generale, too, is developing the Societe Generale European Business Services (SG EBS).
Bank sources say Romania is preferred for such outsourcing centers because of its skilled personnel with a good command of foreign languages. Salaries, too, are lower than the European average.
(English version by Loredana Fratila-Cristescu)