Volksbank breaks silence and announces new strategy

Volksbank, one of the top-ranking banks that faced massive losses in the last two years, has broken the silence after a long period during which formal communication has been rare, announcing its ambition to become a full-service bank in 2011.

Basically the Austrians are now seeking to develop the side of the business that includes savings products and trading services for customers in order to expand their revenue base.
“Volksbank Romania will have an intensive focus in 2011 on offering a full range of banking services. In view of that, we are already offering current account and savings products and we have recently improved our internet banking service to support our customers’ day to day operations,” say bank representatives. Volksbank had grown aggressively in the booming years, but its expansion relied almost exclusively on the sale of mortgage-secured retail loans. From a second-echelon player in 2005, the bank became number 3 in the ranking of banks in 2008, with over 5 billion euros in assets. This however left the bank vulnerable to the real estate market collapse, with its share of non-performing loans amounting to around 25% of the total in March last year. In the first nine months of last year Volksbank accumulated 460 million RON (109 million euros) in net losses, calculated according to Romanian accounting standards. Bank representatives say, however, that operating income had climbed by 3 million euros last year.