Determined to spare no effort in his attempt to turn the bank around, Benoit Catel, the President of Volksbank Romania, has his work cut out. The country’s GDP growth prospects remain timid, lending has been affected by poor demand and the banking system is still struggling to cope with the growing volume of non-performing loans.
However, Benoit Catel remains confident in the bank’s future and he has already seen the first signs of improvement. “For us, 2012 was not a bad year. We managed to contain the increase of non-performing loans and in fact we recorded a slight decrease in that segment. We also made significant progress in attracting new clients and turning into a universal bank. Compared to 2011, we increased our client base by 50 per cent in the corporate segment and by 20 per cent in the retail segment. Volksbank closed 2012 with deposits of 700 million Euro, representing a 40 per cent increase from the year before, and recorded sales of over 100.000 transactional products last year,” he told Business Arena in an exclusive interview.
Please read on to find out more about the bank’s objectives and strategy.
Which market segments is Volksbank Romania’s growth strategy focusing on in 2013?
Loan demand will remain low in 2013, as the retail market is virtually saturated. We see growth potential in the SME and corporate segments and this is reflected in our budgets. In this context, our main 2013 target is to increase our customer base. Basically, we are not focusing on products, we are focusing on customers. That does not mean that we are not interested in lending, but we have already reached a five per cent market share in that segment. So far, we have been operating more or less as a mortgage bank, however that is not enough for us to build a strong retail bank. Of course, we have been hit by the crisis, so now we have to change the model and reorganize the bank. At this stage, individual and corporate clients are equally important to us. We have products and services for all types of clients and we want to maintain a good balance between all these activities.
What was the estimated end-2012 non-performing loan rate? Which segment of the market was the main source of non-performing loans?
The Swiss franc-denominated loans have been the main source of non-performing loans, but fortunately most of them are mortgage-backed. With a ratio of 21 – 22 per cent, our non-performing loan portfolio is a little bigger that the general market level, which hovers at around 18.2 per cent. However, our portfolio has seen a lower growth rate, which shows that we have reached phase of stability.
However, Benoit Catel remains confident in the bank’s future and he has already seen the first signs of improvement. “For us, 2012 was not a bad year. We managed to contain the increase of non-performing loans and in fact we recorded a slight decrease in that segment. We also made significant progress in attracting new clients and turning into a universal bank. Compared to 2011, we increased our client base by 50 per cent in the corporate segment and by 20 per cent in the retail segment. Volksbank closed 2012 with deposits of 700 million Euro, representing a 40 per cent increase from the year before, and recorded sales of over 100.000 transactional products last year,” he told Business Arena in an exclusive interview.
Please read on to find out more about the bank’s objectives and strategy.
Which market segments is Volksbank Romania’s growth strategy focusing on in 2013?
Loan demand will remain low in 2013, as the retail market is virtually saturated. We see growth potential in the SME and corporate segments and this is reflected in our budgets. In this context, our main 2013 target is to increase our customer base. Basically, we are not focusing on products, we are focusing on customers. That does not mean that we are not interested in lending, but we have already reached a five per cent market share in that segment. So far, we have been operating more or less as a mortgage bank, however that is not enough for us to build a strong retail bank. Of course, we have been hit by the crisis, so now we have to change the model and reorganize the bank. At this stage, individual and corporate clients are equally important to us. We have products and services for all types of clients and we want to maintain a good balance between all these activities.
What was the estimated end-2012 non-performing loan rate? Which segment of the market was the main source of non-performing loans?
The Swiss franc-denominated loans have been the main source of non-performing loans, but fortunately most of them are mortgage-backed. With a ratio of 21 – 22 per cent, our non-performing loan portfolio is a little bigger that the general market level, which hovers at around 18.2 per cent. However, our portfolio has seen a lower growth rate, which shows that we have reached phase of stability.
To read the full version, see the print edition of Business Arena.
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