Portugal's Millennium BCP is set to conduct the first major greenfield operation on the banking market in the last seven years, as the bank prepares to launch 39 branches.
Banks that have entered the Romanian market since May 2000, when Austria's Volksbank first arrived in Romania, have done so by acquiring existing players. Most banks have been reluctant to conduct greenfield operations, even though this spares the investor the effort of restructuring an existing bank.
The main exceptions are the niche banks, with limited expansion, such as Raiffeisen Banca pentru Locuinte, HVB Banca pentru Locuinte and Porsche Bank.
Market statistics indicate there is plenty of room for established banks to grow, as well as for new players. Even through two years ago, some bankers forecast the radical consolidation of the market, which would be dominated by 3-4 players, the fast expansion of lending and branch networks shows there are still resources, with the game dependng on the sums a bank or another is willing to invest to gain customers. Mortgage lending accounts for a mere 2% of gross domestic product, compared with 12% in the Czech Republic and Hungary, and 48% in euro zone, while placements in investment funds are estimated at around 7 euros per capita, 100 times lower than in Slovakia.
Overall, nongovernmental lending barely reaches 34.3% in GDP (according to NBR estimates) because of a 7% leap registered this year, still far from the European average.
Out of banks' overall financing, retail lending accounts for around half this year, while relaxed lending conditions are also helping to bolster loan sales.
Romanian banks' territorial networks included more than 5,000 branches in late July, up around 1,000 against last year. In addition, Portugal's Millennium BCP launched another 39 branches onto the market in one move.
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