UniCredit/HVB merger set to begin in March

Starting March, after the merger between HVB and Banca Tiriac is expected to have largely been completed, integration with UniCredit will also begin, Rasvan Radu, chairman of UniCredit Romania and the future chief executive of the bank that is to emerge, told ZIARUL FINANCIAR.

He believes this will directly obtain them the third position in the banking system. The integration process is supposed to end by late 2006. “Year 2007 will probably be the UniCredit/HVB year,” says Rasvan Radu, confident that Erste bank will not succeed in thoroughly starting the engines of BCR in just one year.

In terms of the moves made on the market in 2005, he noted the expansion of the second largest bank on the market, BRD, on the retail segment, backed up by two campaigns that boosted its reputation. “2005 was the year of BRD, after 2004 had been dominated by the rise of Raiffeisen,” considers Radu.

He anticipates that this year the banking system will witness smaller growth, after the boom of more than 50% in the value, in euros, of the assets owned by banks during 2005.

One of the causes of this will be the lower growth potential of foreign currency lending amid rising costs, both internationally, and in the wake of the administrative measures adopted by the NBR. At the same time, banks are likely to register abroad many of the major loans granted to companies, in order to elude one of the major limitations imposed by the central bank. Thus, the respective loans would no longer be reflected in the balance sheets of the domestic branches of international banking groups, and the growth of the total banking asset would be hurt. The battle will be tighter for raising RON assets, too, since it is hard to believe that many banks will be able to afford very low interest rate margins.

“Higher competitive pressures will emerge, which is a positive thing, especially as the battle will be fought on a fair basis once BCR is privatised,” says Rasvan Radu.

He believes that RON interest rates might register a slight correction, given that the NBR”s interest rate is supposed to be relatively stable, within the 7-9% bracket. At the same time, UniCredit Romania”s top man believes the domestic currency will continue its appreciation trend. razvan.voican@zf.ro