Battle over bronze medal on banking market

The battle on the Romanian banking market will be fought for the third place only, as the top two banks, Banca Comerciala Romana (Romanian Commercial Bank – BCR) and Banca Romana pentru Dezvoltare (Romanian Development Bank – BRD)-Groupe Societe Generale, are hard to outrun, because they are too far ahead on the market.

“The game has just begun. There are two leaders, BCR and BRD, as well as a large number of banks competing for the third place and ING is one of them. The winner will be decided in the next three years,” Jan Op de Beeck, former ING Romania president said. BCR accounts for more than 30% of the market, while BRD has 13.5%. Six banks, ABN, Raiffeisen, ING, BancPost, Citibank and HVB are clashing over the third place and competition is tight. To threaten BCR’s position, major moves would need to occur (a merger of three entities or two acquisitions), which is unlikely considering the shareholding structures.

ING used to be number one in terms of assets held until last year, but was outstripped by ABN and Raiffeisen. This year, ING embraced a rather aggressive strategy on the lending market aimed at the major state-run companies.

All six banks are mainly battling on the corporate market. The retail market sees Raiffeisen and BancPost as having a competitive edge due to the high number of branches.

Corporate market profitability has plunged considering the competition and the lack of market growth. On the other hand, money is much more readily made on the retail market, but this entails larger and more investments. Jan Op de Beeck feels ING Romania has very good prospects for the end of the year in terms of revenues and market share, as well as profits. The bank’s profit amounted to $27 million last year. Jan Op de Beeck ran ING Romania between June 2002 -August 2003 and became Head of the Retail Financial Services for ING South West Europe yesterday.