The boost in lending, triggered by the declining interest rates, can be seen in the Romanian-based banks’ first-half global results.
Those banks that chiefly focused on retail (Raiffeisen Bank, Banc Post, Alpha Bank, Banca Tiriac) have posted a significant increase in net assets, whereas the banks whose strategy was aimed mainly at companies (ING, HVB) have stagnated or even logged a slight decrease.
“With only one exception, the banks that managed to get a bigger market share were those aggressively oriented towards the retail market, which suggests that the banks which will not allocate enough resources to this market segment will find it increasingly difficult to keep their position,” says Radu Craciun, senior analyst with ABN Amro Romania.
“The aggressive marketing policy of some of the medium-sized banks seems to be working, as they have eaten into the market shares of the big players. It remains to be seen whether this benefits or harms the quality of the client portfolio,” Craciun added.
The banks are engaged in a fierce battle on the corporate front, as they are operating with hardly profitable rates and fees. Many banks are even applying “dumping rates” to attract corporate clients. This segment will post much smaller growth than the retail banking market, which is by far more profitable.
Total assets dropped 1.1% in real terms in the entire banking system during the first half, from 13.45 billion euros (at the end of last year) to 13.29 billion euros (on June 30, 2003). Expressed in ROL, total banking assets did post a slight increase – up 6.6%, from 469,712 billion ROL to 500,888 billion ROL, a little over the first-half inflation rate (5.7%).
According to the official data released by the central bank, Raiffeisen Bank Romania posted the highest growth pace, as its strategy has been visibly aimed at the retail segment. The Austrian group’s branch has managed to get 6% market share in terms of assets, climbing to the fourth place in the top 15, ahead of Dutch ABN Amro Bank, which also increased its market share in H1, 2003, from 5.1% to 5.6%.
“This evolution is in line with our expectations and proves beyond a doubt that Raiffeisen has chosen the right strategy, as we want to improve efficiency by increasing the market share for all the segments and products, outpacing the market’s average growth pace. Raiffeisen Bank will maintain the same growth pace in the second half and next year, because our infrastructure – subsidiaries, IT systems, staff – has the necessary capacity to deal with an increased volume of operations,” Raiffeisen Bank president Steven van Groningen told Ziarul Financiar.
oana.nuta@zf.ro