“Romania was a nice surprise to us in 2017. For the first time we were involved in transactions that covered all corporate finance products for private companies – sale of bonds – that is debt, sale of shares and the mergers and acquisitions market. In the previous years, we were mainly involved in non-performing loan deals and prior to 2007 we used to be the biggest bilateral funding provider for the Romanian government via the Finance Ministry, for the state-run companies or municipalities.”
Between November 2016 and December 2017, Deutsche Bank worked with private companies in Romania on transactions worth more than EUR2 billion: the sale of eurobonds by RCS&RDS/Digi, Digi’s IPO, the sale of bonds and shares for Globalworth, the largest office building owner in Romania, and the surprise of the end of the year, the sale of a Bitdefender stake in a deal that valued the Romanian company at more than $600 million.
Digi’s listing on the Bucharest Stock Exchange by sale of more than EUR200 million worth of shares, showed the Romanian market is deeper than we had expected, Mihai Ionescu added.
“I think we can have EUR500 million IPOs in Romania, too.”
He hopes 2018 will be just as good, considering Deutsche Bank is involved in talks with several Romanian private companies for various types of funding – sale of bonds or shares.
The problem is that Romanian private and state-owned companies do not rely more on the capital market to finance their operations or investments and use only banks. The financial system in Romania is lagging far behind.
“We want to be like Poles, but we don’t do what they do.”
Romanian state-owned companies could be much more powerful, could make acquisitions abroad and boost the value of the capital market in Romania quite a lot, if only there was a vision for it.
“There is no story for the state-run companies, there are no investment plans – I think Hidroelectrica maybe had a project in Tarnita, what happened to it? – they lose opportunities – Electrica could have bought Enel’s operations, they don’t want to expand abroad – you can use state-run companies to create a strong capital market that would boost the value of all companies in Romania. But there is no vision. Romania could absorb tens of billions of euros.”
Romania’s financial system is lagging far behind, companies still go to the bank to get funding.
There is room for consolidation in Romania’s banking system, what is lacking is a consolidator. “There is no obvious player to buy and put it together.”
Romania needs healthy banks, properly capitalized, to ensure capital for the economy, but capital must also come from abroad and keep the economy going. The Romanian banking system cannot meet the financing needs of Romania on its own, Ionescu said.
Is Deutsche Bank interested in Romania? “Interested in Romania? The answer is yes. Interested in a local banking presence? No.”
Deutsche Bank’s technology center in Bucharest is doing very well. It is a center that develops applications for the entire group and employs people who returned to Romania and people from other countries. The plan is to hire more, the Deutsche Bank official said.
(English version by Loredana Fratila-Cristescu)