BRD keeps its balance on testing market

Guy Poupet, president and general manager of BRD-Groupe Societe Generale, shares with Business Review his take on the current state of the Romanian banking market and outlines the lender’s strategy for the near future.

Anda Sebesi

How would you describe the current situation of the Romanian banking market, and what are its perspectives for this year?

The Romanian banking market is having a pretty difficult time, after a crisis that marked the whole economic environment. The reduced activity on the corporate segment and lower purchasing power of Romanians brought consumption and demand for banking products and services down considerably. Meanwhile lenders have faced delayed installments both from individuals and corporate customers. This put up the cost of risks and dented profits. We hope that once the local economy recovers, banking activity will revert to better levels but it is hard to believe that we will see similar levels as those reached in 2007 and 2008.

How intensely do you think the effects of the current financial crisis will be felt by the local banking system?

It depends on how rapidly the local economy recovers and to what extent any increase will be manifested in earnings. There is still a need for investments, new houses and cars and it has to be satisfied. It is hard to give a diagnosis about the whole banking market but it is likely to see a stronger recovery starting 2012.

What segment of the market – lending or savings – was the most dynamic last year?

From the lending perspective, real estate loans were a dynamic segment of the market, stimulated mainly by the First House program. But I think it is an exaggeration to talk about an increase when the demand for banking products and services was at such a low level. Generally promotions for credits are enjoying success but the demand must become stable before we talk about increases.

BRD-Groupe Societe Generale has the Restat refinancing loan in its portfolio. How have your customers responded to it and how do you see the refinancing activity in Romania?

Our promotion has been successful and so we decided to extend it to June 14. Generally, refinancing is a market that works in such periods of time. The success of this type of product depends mainly on interest. Here what matters is the business strategy of each player to achieve its goals. If we speak about the magnitude of refinancing we can see that many lenders have offers to refinance old credits in their portfolio at the moment. When the demand for credit gets back to a higher level it is likely that refinancing will no longer be an important issue on the commercial agenda of banking institutions.

The portfolio of BRD-Groupe Societe Generale is structured on clear market segments. How do you think the segmentation of the banking market will evolve in Romania in the coming years?

The segmentation of customers, as a working instrument for lenders to take into consideration both social-professional categories and the level of earnings that customers have at their disposal. As for now, I think that large universal banks – such as BRD – have adjusted their activity to the specifics of the Romanian market pretty well, and have a complete range of products for all categories of customer. Despite this, there are and will continue to be lenders specialized on a specific niche, focused on specific categories of customers (the liberal professions, wealth management and so on). From this perspective there are no differences between the Romanian market and other very well developed markets.

How would you characterize BRD-Groupe Societe Generale’s financial performance in 2010?

Our activity evolved satisfactorily last year despite the economic environment being unfavorable. BRD-Groupe Societe Generale posted a net profit of RON 533 million. Looking back, we can say that we took the necessary measures in order to maintain the macro-balances of the bank. General expenses came under strict control while at commercial level we insisted on making the most of synergies between our business lines and managed to compensate partially for the drop in demand.

What will the main components of BRD’s strategy be in 2011?

Our strategy will remain the same. We will continue to launch innovative products, with the majority of them being premieres on the local market. In addition we will continue to create synergies between our business lines in order to come up with integrated offers at competitive prices. But it all depends on the increase in the market’s absorption capacity, which is directly dependent on the recovery of economic growth.

How many branches are operational at the moment and what are your plans for the future in this respect?

Our network consists of over 930 units and we think that this can meet the actual needs. However, we are not ruling out the possibility of opening or closing some units depending on the conditions.

anda.sebesi@business-review.ro

CV Guy Poupet

A graduate of the Institute of Political Studies in Paris in 1973, and the Public Law faculty at the University of Paris, Poupet, 59, has been working for Societe Generale since 1975, starting his career as controller. The Frenchman has held various top management positions in the group’s subsidiaries in Argentina, Senegal (general manager at Societe Generale de Banque en Senegal), the Czech Republic (vice-president and deputy general manager at Komercni Banka) and Egypt (vice-president and general manager of National Societe Generale Bank).

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