Millennium bcp is analyzing strategic solutions for its Romanian subsidiary, which entail either the reduction of exposure or looking for a partner to support growth, considering that the local bank’s market share is significantly low, the institution said in a report.
Millennium is also present in Poland, Mozambique, Angola, Switzerland and Greece. Last year, the institution wanted to sell its Polish subsidiary, but no deal was concluded due to lack of attractive offers.
In 2005, Millennium planned to become a multinational bank and also be present in European countries with emerging economies. It became interested in Romanian lender BCR, but failed to acquire the bank after Austria’s Erste Group Bank AG offered an unbeatable price of EUR3.75 billion.
In 2007, Millennium embarked on a very ambitious strategy and opened several subsidiaries in Romania, which targeted both large companies and small and medium enterprises. The bank also offered Swiss franc-denominated mortgage and consumer loans, but withdrew the offer in 2008 once the first signs of the crisis appeared.
Millennium’s market share in Romania stands at 0.8% on the loan segment and at 0.6% on the deposit segment.
Millennium Romania operated 65 units and employed 668 people at the end of June. Its client portfolio included 33,736 clients.
The bank’s assets stood at EUR561 million, of which EUR406 million were credits. Last year, Millennium Romania closed eight units with a view to reducing operating costs, while costs with provisions for non-performing loans continued to weigh heavily.
Millennium Romania banks on a medium-term loan of EUR150 million from the mother bank and on a stand-by credit facility of EUR75 million. On the other hand, Millennium was also faced with problems and the Portuguese government had to intervene last summer with a capital injection of EUR3 billion to help the bank.
Millennium Romania reduced the rate of its foreign-currency loans from 89% to 85% in the first half of the year, and plans to shift to leu-denominated loans.
(English version by Ioana Tudor)