Eximbank focuses on export insurance and guarantees

Eximbank will focus on granting insurance for exports and guarantees as of this year and will also develop products to cover foreign exchange and interest risks, Carmen Radu, the chairperson of the bank stated.

Eximbank”s capital was increased by 186 million euros early in February, by a contribution in cash from the State Assets Resolution Authority (AVAS) and SIF Oltenia, thus reaching 217 million euros.

“The capital inflow will be gradually placed in credits, and the temporarily available amounts are deposited in accounts with the NBR,” says Carmen Radu. She says this capitalisation will allow the bank to become involved in larger value projects per client, due to the NBR norms that limit maximum exposure to a single debtor.

“All the eximbank-type institutions are more involved than we are in the insurance and guarantee department,” says Radu, emphasising that as far as the Romanian bank is concerned, the two aspects are not as well developed. On the other hand, there is no demand for such products on the domestic market, as exporters are quite reluctant in accessing them. Therefore Radu says the focus will be on the development of the clients” appetite for such products. The bank used to focus largely on lending until last year, with its most sought after product being the interest rate bonuses. These were prohibited by the Competition Council, however, which deemed them as unallowed state aid.

Still, the most important growth for this year is expected to come from lending again due to the capital inflow.

“Eximbank took into account a 187% growth of the credit portfolio by the end of 2006. We estimate we will issue a 20% higher guarantee volume than in 2005 and the volume of insured exports will be 75% larger,” Radu added. Last year”s results will be made public as soon as they have been approved by the General Meeting of Shareholders.

AVAS owns 96% in this bank, while SIFs (Financial Investment Companies) hold the rest of the shares. liviu.chiru@zf.ro