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BCR official: Romania is losing competition for new investments

Romania is 'fighting' for new foreign investments with Poland, Bulgaria, Czech Republic and Hungary and does not have a good situation compared to these states, the executive president of BCR, Dominic Bruynseels said.

'People see opportunities in other EU states. For instance, investors are looking toward countries like Poland which did not experience recession. If they have money available for investments, investors are looking toward Romania too, but compared with Poland, Bulgaria, Hungary and the Czech Republic,' said the BCR official at a press conference.He showed that Romania should rapidly improve the situation.

'In fact we should rapidly improve the situation better than our competitors,' Bruynseels continued.

On the other hand, he considers that the Romanian market is attractive because it is a large one, with 22 million people and the banking degree is low.'That is why we are here, to sell long term potential. That is why the other banks are here too. If you consider this market it would be the last from where you should withdraw your money. Bankers do not consider things on a short term when they invest in a country. I would say this is the last market I would withdraw from,' Bruynseels said.

As for the absorption of European funds, he showed that the government has been faced with some difficulties but the authorities' attention was captured.'Recently I worked within the Foreign Investors' Council to promote a plan of initiatives to boost economic growth in Romania. Certainly the government's attention focused on IMF and the approval of the sixth installment. I hope that when we return from our vacation in September we will also have action besides dialogue,' the BCR official said.He explained that private projects co-financed from European funds lack capital coming from entrepreneurs.

About the statements made by the executive president of Erste Bank Andreas Treichl concerning the fact that Romania has absorbed only 38 million euro out of 35 billion euro available Bruynseels said the head of the Austrian group is frustrated about large projects co-financed from European funds.

'If you invested as much as Treichl has in Romania – over 4 billion euro, you would be frustrated too', the head of BCR said.He considers that the problem for the implementation of large projects concerns political will to achieve them.'If the government wanted to do something it would do it. If you have a will you can purchase the ability,' Bruynseels continued.

At the same time the head of BCR mentioned that economic situation in Romania is one of the most difficult of the countries where Erste is present. Referring to president Basescu's statements concerning the banks, Bruynseels said budget deficit is the government's problem of incomes and expenses and has nothing to do with banks.In 2006 Esrte Bank took over 61.88% of BCR shares for 3.75 billion euro from the state, EBRD and International Finance Corporation. The Austrian group later increased its participation to 69.17% by taking over shares held by BCR employees.

Romanians will notice a deterioration of situation when they return from vacation

Dominic Bruynseels, the executive president of BCR considers that most likely the banking sector in Romania will have losses this year because of the growing pressure, according to local accounting standards RAS.As for BCR Bruynseels said operational profit is on the rise which is a very good evolution and provisions will drop in the future when the bank's net profit is all right.'I do not expect provisions to drop before mid 2011,' he mentioned.

He showed that the situation of the retail credit portfolio was getting better before the government announced budget salary cuts but then it deteriorated again.'When people come back from their vacations in September we will notice a deterioration of the situation. I anticipate difficulties in September, October, and November. The results will be worse than before and we will have additional provisions,' the BCR official continued.As for the corporate sector, the BCR official considers the growth rate for un-performing credits will not drop before the end of the year.

Romania needs fiscal discipline rather than a new loan from the International Monetary Fund (IMF), said the Romanian Commercial Bank (BCR) President Dominic Bruynseels on Thursday. The BCR head called a meeting with the press on Thursday in which he commented a range of aspects related to the Romanian current economic situation and also the commercial results reported by the bank on this July 30.

The BCR posted a net after-tax profit and after the payment of minority interests of 488.5 million lei (117 million euros) in the first half of the year, down by 19.5 percent from the first six months of 2009. According to a bank press release, the drop was mainly the result of the much higher costs for the provisions in the wake of the economy's contraction, that has a major impact on the BCR market and clients.

The BCR has maintained its general market share mostly backed by the increased lending in the corporate area, while the retail crediting was slowed down by the abrupt drop in the eligible demand.The BCR, an Erste Group member, is a universal bank targeting both the retail and corporate clients. It is the most important banking institution in Romania, with managed assets at more than 16.4 billion euros. The BCR offers the full range of products and services for the population; it currently operates 668 retail units (for the population and micro-firms) opened countrywide, in most towns of more than 10,000 locals.

Sursa: http://www.actmedia.eu

Tags: bcr bruynseels market would president situation official romania investments euro

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