OREANDA-NEWS. May 06, 2011. A year ago BCR Chisinau informed of the stirring up of its activities. Thus, the bank, which opened in Moldova’s capital city back in 1998 thanks to political will, after 12 years of not too functional operation, to be honest, informed of the change in its priorities and the approval of a new direction – towards development. Sorin ANDREI, BCR Chisinau Executive President, answered InfoMarket agency’s questions on the changes which have taken place within the bank lately and the goals for the following years.

Which were the reasons that drove changes which BCR Chisinau started early last year?

Sorin ANDREI: As far as you well know, BCR was purchased by Erste Bank group in 2005-2006. BCR, the first bank in the Romanian system, with over 20% market share, has been through a complex restructuring, adaptation and integration process within the framework of the Erste Bank group during 2006-2008. Tremendous work has been conducted in order to readapt the bank, which held almost one third of Romania’s banking assets in about 600 branches all over the country. The business lines in bank’s development have been traced, the whole organizational structure being changed. The project was called IDB – Bank’s Integration and Development.

As soon as the ‘core’ had been formed, the time for subsidiaries, BCR Chisinau including, has come. Thus, in 2009, the restructuring and upgrading of BCR Chisinau began. The project in Chisinau was called Lotus, which was, in fact, an IDB reflection. Lotus counted about 30 sub-projects which addressed all bank’s development areas. Joint teams of experts from Moldova and Romania participated in the project. Romanian experts came up with experience and practice, while Moldovan ones - with expertise on the specifics of the market, its potential, local competition.

It took a year and a half to restructure BCR Chisinau to its core and I should say that today the bank’s structure has two distinctly defined business lines – corporate and retail. We have separated the risk assessment department from the sales department, because this stood out as a need. Frankly, I must admit that in these hard times, the risk assessment department leads the bank; it is particularly the last resort that says ‘yes’ or ‘no’. Neither the president of the bank can go round it.

It is probably not the best market development recipe; however, it is important for the protection of the bank, of its clients and its shareholders. Front-office has to provide enough arguments to support a certain client so that it is approved by the risk assessment department. The practice when in order to get a credit a client first saw the president of the bank is no longer in place …

Last year you organized a press conference on the completion of the reorganization stage, informing of a new stage in the development of BCR Chisinau. Which have been the successes and failures so far?

Sorin ANDREI: The second half of 2010 and beginning of this year have clearly defined a new stage in the development of BCR Chisinau, which followed the completion of the process of restructuring and integrating into the Erste Bank family. We have moved towards a redefinition, upgrade of the range of products and services, relations with our clients … Huge amounts of work have been carried out as regards savings products. Here we have advanced rather well. And today too we are competitive on the market as regards the attraction of deposits, which we almost did not have before.

We have finished the infrastructure, the crediting module, and then we offered new products on the market. Corporate offers were prepared first, then the time for retail has come too. In April 2011 we have launched a new mortgaging program Residential Extra BCR with a crediting period of up to 25 years under advantageous conditions.

All these fit within a general bank development plan. While last year we conducted the work internally, which was little visible, then now the results of our activity will be seen more both on the market as well as to our clients.

We have a range of objectives that refer to the automation of our processes and services. We are in the middle of implementing a new service, called Internet Banking, which is a foreign product, implemented, however, by Moldovan experts. We hope to get the first tests this autumn already.

Also, we have a series of new projects with banking cards, particularly with credit cards; while for MasterCard, which is already in use, first VISA products will be offered. Within the framework of Erste Bank group the withdrawal of cash from BCR cards will be regarded as local inter-banking, meaning that commissions will be twice cheaper. It is about integrating 7 thousand cash dispensers.

As regards the corporate banking, we group synergies on attracting international clients to Moldova, ensuring them with a range of cross-national products, warranties and services of “adaptation” of their businesses to this country. Our goal is to become the first partner bank for international operators.

There is strong competition on this segment given Moldovan banks that are part of European groups.

Sorin ANDREI: Yes, I agree there is harsh competition, but it only mobilizes us. And we should not forget that we have an extremely complex experience in this part of the world. Thus, there should be no reasons for us to fail. I am sure that we shall have consistent results.

Do you place yourself as a Romanian bank or as a bank that is part of the European Erste group?

Sorin ANDREI: Undoubtedly, we are a European bank which operates on European level. There are regular meetings within the framework of the group at which the representatives of all subsidiaries set concrete solutions for concrete clients. We provide our support to each others so that our clients can, by means of our banking group, easier solve their problems of entry into a specific market. We make use of the Erste group network as a driver for securing the activity of our clients in Central and Eastern Europe. Particularly, in January, we started having more frequent contacts with our colleagues from Ukraine, where, there is a bank of our group too.

Within the framework of the group new consistent projects, especially of changing the image at the group level, signs, logos and many other things, are being prepared ….

The Erste Group is represented in more than 40 countries. As a bank it is present in eight countries. The fact that we are part of BCR grants us the neighborhood aspect and besides, BCR is a leasing and asset management company, pension fund, insurance … It is the second brand in Romania.

In the banking system everyone is proud of being able to afford big, but cheap resources. Recently, BCR Chisinau launched a new mortgage credit Residential Extra BCR... Where does the money come from and how well did your clients notice this product?

Sorin ANDREI: This is exactly one of the development objectives of the group in general and BCR Chisinau in particular. The product the bank offers is extremely palpable and concrete, aiming at helping its clients reach their aspirations. The aspiration to own a home, both in Moldova and Romania, is one of the fundamental elements of existence – the right to a place of residence.

We set as a goal at the group level to support these aspirations as intensely as possible. In Romania too we are one of the main operators on this segment. Also, we have specific crediting and savings products, which differ from mere crediting. Thus, for instance, BCR Banca Pentru Locuin?e is a subsidiary of BCR which specializes in housing crediting. The main product of the BPL is as follows: an amount of money accumulates on a savings account, to which the individual receives interest and money from the state. The state, thus, supports this initiative and creates a long term savings state premium. The support provided by the state, however, is not small – the state offers 25% of the amount saved during one year, but not more than 250 Euros. It is best to open a savings account of 1000 euro, to which you get a profit of 250 Euros from the state. For a family of 3 members, minors included, 1000 Euros for every member is deposited and in one year you get 740 Euros from the state; the contract is concluded for a period of 5 years and after 5 years the family gets about 20 thousand Euros, after investing only 3 thousand Euros. It is already a rather good advance payment for purchasing a place of residence. In the second stage, long term credit can be obtained at the same bank at an advantageous interest rate: 3% upon savings and 6% upon crediting. And, by the way, there are many Romanian nationals in Moldova which can participate to this program...

... And they can come to BCR Chisinau?

Sorin ANDREI: The main holder of this program is the Banca Pentru Locuinte, but we currently negotiate for bringing this product to Chisinau too. There are no specific restrictions on the purchasing of real estate – the money can be used for constructions, re-planning, purchase of furniture...

Our vocation is targeted at supporting the retail real estate sector. Here too, there are two reasons: support the individual, the family; the second refers to supporting the constructions sector, which is the driving sector of the economy, since the development of constructions directly brings about the development of other areas. The opposite effect of this was visible during the recent crisis…

But let’s go back to the question: Where does the money come from? – The group is based on a mechanism of 130 years of savings and crediting and now it has rather consistent long term resources. They are re-distributed depending on the market opportunities on which we operate.

How do you see your crediting portfolio, given the orientation of BCR Chisinau towards the corporate business, on the one hand, and towards retail, especially real estate credits, on the other hand? To what extent can the bank take the risk of investing half of the resources into housing?

Sorin ANDREI: We don’t think our real estate crediting is risky, because it shows us that the people are careful with their houses and apartments. They all pay on time, in practice. Obviously, there are thorough assessments of the capacity of the individual to reimburse the credit at the stage of issuing credits and these preliminary assessments have to be good. Such a structure of the credit portfolio as 50% retail (including 25% of housing) and 50% corporate (including 25% equipment) is not risky. There were many discussions on various mortgage projects. Now, when the first results of the project First House in Romania are there and when one has informed that of 35 thousand apartments, only 17 clients did not meet their commitments, this percentage is very small. And while in previous years there were difficulties, including with real estate credits, because of the crisis, then in the field of credits for housing, we almost have no troubles – people do not make jokes with their homes.

How can BCR Chisinau influence the banking culture changes in Moldova so that people access a wider range of services?

Sorin ANDREI: There are absolutely practical and simple things which banks can do: we have to stimulate, in true terms, the savings culture and have to offer such banking services that would close the cash flow in the banks and as a result the banks will become more useful and will have much cheaper resources. For instance, payment of utilities: if we close the flow on payments – that is the client receives a salary card, but a certain amount of money is from the beginning reserved for utilities. These are current resources for the bank, which in the end play an influential role on the crediting offer. There are more than 800 thousand households in Moldova and that means 600-800 million lei, which are payment resources that are temporary free.

From the crediting viewpoint, to my mind, we shall very soon reach the stage when there will be consistent projects in Moldova that will require large funds, for which banks, certainly, have to come together, join their power. Financing of national projects will require cooperation among banks.

Last year you referred to outsourcing, including of services, which are usually regarded as banking services...

Sorin ANDREI: We outsource pretty much and there is still room for more. Even our salaries are computed by another company, let alone classical services, such as cleaning services, publicity, etc. We intend to outsource another range of services, but the market is not prepared to offer us what we need: for instance, we would be greatly interested in the maintenance of cash dispensers, cash receipts, etc.

According to some information, today BCR Chisinau means 11 thousand clients, over 140 employees, three branches and one representation. And according to the data of last year, the financial result was 190 million lei losses. What are your further plans for 2011?

Sorin ANDREI: By the end of the year we intend to reach 20% growth, that is, to increase the number of clients up to 14-15 thousands. We have plans regarding the extension of the network – we shall open branches outside of Chisinau, with 2-3 more branches and representations to be opened in Chisinau. As regards the losses of the previous period … They are due to the restructurings which we carried out and they were covered on the account of the capital increase. I think that in the following two-three years, they shall be covered – this year, according to our plans, our income should be not less than 20 million lei, but probably even more: the data of the first quarter show more than 8 million lei income. We are a team with clearly defined goals. The market will definitely notice the contribution BCR Chisinau made to the development of the entire banking system of Moldova, while our services are a support to our clients. It counts with whom you do banking.