Many Romanian company owners are primarily concerned about preserving their living standards, and prefer to file for insolvency rather than add to their capital, whilst multinationals boost the capital of their subsidiaries, says Rasvan Radu, chief executive of UniCredit Tiriac Bank.
"This is now a true phenomenon. Their chief concern is to accumulate a personal fortune and prefer to keep the money in their own accounts, including foreign accounts, which proves a lack confidence in the prospects of the businesses they created. The remarkable thing is that multinationals continue to contribute capital to support local subsidiaries, a sign that foreigners have faith in the development of the market," said Radu, head of one of the largest banks on the Romanian market. He says local entrepreneurs would not even hear about pledging collateral or about contributing additional capital to show their personal commitment to the business's recovery, which could secure them new funding.
The banker warns that such behaviour will remain in databases.
"All records will obviously be kept. Unfortunately, we have not reached the level where Romanian entrepreneurs are keen to leave behind a solid family business, even though there are also exceptions, when everything is reinvested or only very little is withdrawn from the company. Individual protection is the prevailing trend, and so is ignorance as to the limit of bank's involvement."
Radu says it is not the bank's job to "carry the load" of a problem company, as some entrepreneurs believe, because the bank does not partake in the company's profit, it only gets the interests charged on the loans. He adds it is normal that the entrepreneur should be the first to bear the burden in a time of crisis. In an interview given to ZF, Patrick Gelin, president of BRD, in turn noticed the behaviour of company owners who
