Dragulin, NBR: It’s good to have new Romanian capital

As the economic crisis rages on, two new Romanian-held banks are preparing to enter the market while other established players in the system are counting their losses; however, the NBR considers the financial strength of the main shareholders, Valer Blidar and Horia Manda, has been “proven”.

“It’s a positive sign there is domestic capital lined up for banks,” said Ion Dragulin, head of the NBR’s Financial Stability Department. According to the NBRF official, during the licensing process the NBR asked shareholders to update their documentation, because of the market’s evolution, but even after the final assessment the shareholders’ financial position was deemed as convincing.

Consequently, the NBR has granted an operating licence to Banca Feroviara, owned by businessman Valer Blidar, who controls the group of firms created around Astra Vagoane Calatori Arad. The bank can now start operations. Petre Tulin, from BCR Banca pentru Locuinte, will head the new bank. Before 2005, he was head of the NBR’s Financial Stability Department.

The NBR also awarded a banking licence to Capa Finance, a non-banking financial institution controlled by Horia Manda, a renowned investment fund manager, with this being however only the first stage of the licensing process. The bank will be run by Bogdan Merfea, who came from Raiffeisen.

The NBR is set to organise a new round of stress tests for banks this autumn, when corporate results for the end of 2008 will also be available, probably showing a deterioration compared to the June 2008 situation that was taken into account in the spring tests.

“The fallout of the corporate results’ deterioration has not died out (…), “says Dragulin.

The new tests will show how much capital banks still need to cover the rising amount of outstanding loans, with the NBR anticipating the pace to step up in H2.

The two Romanian-held banks will enter the market at a difficult moment, when the fight for resources is still tight and loan demand still low.

Still, ten years ago, Banca Carpatica entered the market in an even more difficult context and has meanwhile come to operate nationwide.

Banca Feroviara has a share capital worth 45m RON (10.7m euros) and will start operating with a nationwide network.