“I’d want a bank that is more active on the market, but a significant capital inflow is needed for this to happen. One idea is to attract some international financial institutions in the shareholding structure. Privatization is not necessarily needed, the more so as there’s a desire for CEC to remain a national symbol,” stated Radu Ghetea in an interview with ZF.
CEC, which today celebrates 150 years of existence, is entirely held by the state, though the Finance Ministry. The institution underwent a rebranding process in 2008, when it turned from Casa de Economii si Consemnatiuni into CEC Bank and became more dynamic on the segment of corporate lending.
The bank has loans worth EUR12 billion in late 2013 and RON19 billion worth of deposits, which shows there’s room for a lending speedup. The bank’s officials have constantly stated they hold resources for this, but it takes capital for prudentiality indicators not to suffer.
CEC’s capital stands at RON1.16 billion, and the only raises operated in recent years were from the bank’s profits amid EU restrictions regarding state aid.
Currently, CEC has 3 million individual clients and 150,000 corporate ones. Several thousand clients are local public authorities.
Radu Ghetea, 65, is a banking system veteran, with a 42-year experience. His current term ends next May.
CEC Bank’s assets posted an almost fourfold increase in the past seven years, to RON27 billion at the end of 2013. CEC generated an overall gross profit of RON700 million in the past seven years. However, Ghetea says he cannot make any forecast on the bank’s performance in 2014, considering the portfolio cleanup process unfolding at the level of the banking system, a process that entails additional risk provision costs.
“This is a special year for the banking system, with massive losses caused by the drive to remove bad loans from balance sheets. It’s good we have a high solvency rate”. Ghetea specifies CEC was subject to an asset quality assessment process this year carried out by BNR and the conclusion was “there are no reasons of concern”.
Referring to lending in general, CEC Bank head says banks’ lending appetite has not declined, but there is no solvable demand. He believes that after portfolio cleanup banks’ shareholders will bring additional capital where needed to allow for highest possible lending.
“I am confident that when the opportunity arises, banks will bring back the necessary money. There’s high lending potential related to agriculture and infrastructure”.
(English version by Catalina Apostoiu)