The creation of provisions represents the main risk for the Romanian banking system in 2013, which could to the drastic drop of the profitability of lenders, said Radu Graţian Gheţea, the CEO of CEC Bank, in an interview.
Provisions will remain a problem for banks next year, according to him, and he said that he doesn't expect any "changes for the better" when it comes to non-performing loans.
Even though next year won't be easy for our banking system, considering the fact that it is set to implement the Basel III norms, which have strict liquidity and capital requirements, the Chairman of CEC Bank considers that banking has a "great future", in Romania, due to the investment opportunities provided by the economy.
Mr. Gheţea also said that he expects CEC Bank to have a positive result at the end of this year, even though 2012 was not a very good year when it comes to the quality of the loan portfolio.
Reporter: How has lending evolved this year at CEC Bank compared to 2011?
Radu Graţian Gheţea: We are convinced that we will exceed our targets on lending and deposits alike, at the end of the year. We expect to see our loan balance increase 4-5%, and our deposits to increase 7-8%, respectively, compared to the previous year.
On the lending segment, our balance increases, even though they are spectacular compared to the small drops or increases which are seen in the Romanian banking system, do not fully reflect our lending effort, because considering that CEC Bank is focused on lending to agriculture, especially for current output, this means short term lending. For example, we grant loans in February, they get repaid in October, meaning that at the end of the year they are not booked as growth. If we look at the turnover the bank did over the years, as well as in 2012, basically the amount of the loans was turned over twice, t
