The large number of non-performing loans at the Romanian Commercial Bank (BCR) has attracted the attention of majority shareholder Erste Bank, which asked the new management of the bank, led by Tomas Spurny, to implement a process of transformation of the lender, which would make it profitable in 2013.
The officials of Erste Bank yesterday said, at the conference where the bi-annual results were announced, held in Vienna, that the process for the transformation of BCR will span two years, and the priority is to make the bank profitable, which involves the sale of the portfolio of non-performing loans, whose sudden increase could not be "digested" by the lender.
Andreas Treichl, CEO Erste Group, yesterday said that there will be cost cuts and that the situation of the Romanian and Hungarian subsidiaries of the bank is not good at all, as both are posting losses, but he expects the transformation process to yield results and the bank to become profitable next year.
Manfred Wimmer, CFO of Erste Group, yesterday said that the strategic plan of BCR is focused on improving profitability, by reducing non-performing loans.
He explained: "The Romanian subsidiary has a new management, which is trying to implement a strategic plan for the next two years. The priority is to reduce non-performing loans. We will change the collection methods, we will sell the portfolio of non-performing loans".
Aside from reducing non-performing loans, the strategy also comprises a review of the profitability of the network, as 40 branches have been shut down over the last few months. Still, this is not a goal in itself, as the bank wants to identify the areas with potential for growth in the medium and short term. Also, the new strategy will consider switching from lending in Euros to lending in lei.
Gernot Mittendorfer, CRO (Chief Risk Officer) Erste Group, ex
