On the contrary, it will continue to grow on both retail and corporate segments and will try to gain market share on such segments as micro-enterprises, small and medium-sized enterprises and municipalities, says Michal Szczurek, the new chief executive of the ING Bank Romania.
Szczurek says he has never been tasked with downsizing the operations of a bank in his entire career and has only worked on markets that were still growing.
“When growth started to slow down in Europe, I moved to Asia. Now I know Romania is now Asia but ING has an excellent position here, a very good reputation and a strong distribution model on the retail market which allows it to continue to gain market share,” said Szczurek, 41, one of the youngest bank CEOs in Romania. He also believes synergies with bank branches for corporate customers can be used.
RBS and Citi, two major brands like ING, announced they would drop their retail operations in Romania, after RBS even tried to sell its entire Romanian business. ING on the other hand, stood out by pursuing a universal bank strategy in the past decade.
As the parent bank in Netherlands continues to make harsh restructuring decisions having announced last month it would slash another 2,400 jobs in the Netherlands and Belgium (for a total of 7,500 in the last 15 months), rumors spread in Bucharest about similar steps. This was partly fueled by the closing of the stock brokerage business in Bucharest last year.
Is ING thinking of selling its retail unit in Romania?
“No way. Why would they have sent me to Bucharest if they were planning something like this?” Szczurek wonders laughingly. ING Bank Romania does not need restructuring and the banker says that when he says something, he really means it.
It took him a couple of months of lobbying by the headquarters in Amsterdam to get his plan for growth in Romania approved but in the end it was not that hard considering the group already has a positive view of the local bank.
The group has taken harsh steps and sold many assets outside Europe in the last few years but a time will come after all the restructuring when it makes business growth decisions, Szczurek says. Even though it posted EUR2.6 billion net profit in 2012, it has not finished repaying the EUR10 billion bailout it got in 2008 and has to drop its insurance business.
ING Romania’s CEO says this country is definitely one of those where ING wants to grow. ING Romania does not need acquisitions to do it, Szczurek believes.
The local bank does not depend on Amsterdam for funding, considering it had 11 billion lei (EUR2.5 billion) in deposits and RON9.6 billion in loans at the end of 2012.
Unlike other bank CEOs who are talking about restructuring, Szczurek is talking about growth and does not think the high rate of non-performing loans on the local market is that alarming; ING is below the system average with its 18%. His priority is to position ING as best as possible for when the economy resumes growth.
The unit working with major corporate customers had a significant contribution to last year’s record gross profit of RON232 million.
After focusing on customer relations quality and on reevaluation of the prices charged, the commercial banking unit, too, will switch to ‘growth mode’.
Szczurek says the bank’s services are moderately priced and the very active customers are getting better terms. The banks plans to achieve growth also by attracting customers from segments it does not have much of a presence on such as local companies.
It is also trying to establish a presence in the municipality financing business. It has recently been lead arranger of a syndicate that lent RON100 million to Bucharest Sixth Sector City Hall due in ten years.
Most of the efforts to expand the customer portfolio will be directed towards micro-enterprises and small and medium-sized enterprises even though it is a highly risky segment, with many sour loans.
Michal Szczurek was appointed chief executive officer of the ING branch in Bucharest as of September 2012, replacing Misu Negritoiu who had run the bank for six years, turning it into a universal bank.
(English version by Loredana Fratila-Cristescu)