Bank Leumi, the domestic arm of one of the biggest Israeli financial groups, ended the first half of this year with net losses of almost 1.9m RON (0.5m euros).
Israel's Leumi entered the domestic market last summer, acquiring almost the entire stake in Eurom Bank, a small player in the system. Later on, the name of the bank was changed to Bank Leumi, to show it was part of the Israeli group. Eurom Bank in the first half of 2006 reported losses of 8.7m RON (2.4m euros).
"We'll generate profit starting November, but will post losses for the entire 2007. Starting 2008, we will turn into the black and be able to offset the losses of past years," Laurentiu Mitrache, general manager of Bank Leumi, told ZF.
He says the bank has expanded at a fast pace in the past year, though one cannot say it is developing aggressively for the time being.
In late June, the volume of loans released by Bank Leumi had climbed to 423m RON (135m euros), double the level reached at the middle of last year. The bank's overall assets registered slower growth, by 60% in RON, to 718m RON (229m euros).
Like most banks in the system, Leumi managed to boost the volume of released loans faster than it drew funds from customers. Deposits rose by only 47%, to close to 554m RON (177m euros), starting, however, from a larger basis of comparison.
The Israeli shareholders have recently announced a significant capital increase, by some $65m. In the wake of this move, Bank Leumi Romania will have a share capital of around $100m. Mitrache says the funds will support the bank's overall development, both in terms of investments in the network and IT systems, and of lending operations.
The bank currently operates a network of 35 branches and will open several new offices by yearend. Mitrache says the refurbishment of old branches, to bring them in line with the group's
