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Banca Transilvania buy Bancpost Romania from the Greek Eurobank Group

By Andra Beltz
Banca Transilvania (BT) will buy from Eurobank Group the shares it holds in Bancpost S.A., ERB Retail Services IFN S.A. and ERB Leasing IFN S.A., with the two banks having reached an agreement in this respect, according to a BT release issued for AGERPRES on Friday.
'The takeover of Bancpost is an opportunity for BT due to the integration potential with our business. This acquisition completes BT's organic growth strategy, consolidating our position on the market. We are ready to adapt responsibly to the new BT dimension and new realities. Our bank will continue to support Romanian entrepreneurs and the local economy, creating added value for shareholders, customers and team. We thank Eurobank representatives for support, professionalism and collaboration in the context of negotiating this transaction of strategic importance for both parties,' said Horia Ciorcila, Chairman of Banca Transilvania's Board.
Banca Transilvania and Bancpost will continue to carry out their independent activities until receiving the Central Bank and the Competition Council's approvals, estimated for the coming months. Once the takeover completed, BT will integrate Bancpost into its business with the support of both banks' teams.
With over 13% market share and total assets of 54.9 billion lei (11.9 billion euros), Banca Transilvania is the second-largest bank in Romania. BT has over 7,000 employees, 2.2 million customers, is the market leader in terms of bank cards and has approximately 500 agencies.
Bancpost ranks 9th among the banks in Romania, with almost 3% market share and assets of 11.6 billion lei (2.5 billion euros). Its team has over 2,000 employees, and the network has some 150 agencies. Over one million customers bank with Bancpost. (rbj/25.11.2017)

Garanti Leasing and EBRD join forces for MSME financing

>>>€10 million loan to boost small businesses’ access to finance

By Theo Moreni

The EBRD is providing a loan of up to €10 million to Garanti Leasing Romania to broaden access to finance for local micro, small- and medium-sized enterprises (MSMEs).
The funds will strengthen the competitiveness of private businesses by increasing the availability of financing. At the same time Garanti Leasing will be able to grow its leasing activities and expand its MSME portfolio.
Even though leasing represents an attractive alternative for local MSMEs to support their investment needs, it remains a less-developed funding channel in Romania. Garanti Leasing is part of Garanti Group Romania, one of the most dynamic financial groups in the Romanian market, dedicated to best serving its clients, through fast and innovative financing solutions. Garanti Leasing continues to grow its business volume and portfolio by concentrating on MSMEs in economic sectors such as transportation, the health sector and the automobile supplier industry.
This is the second time the EBRD is joining forces with Garanti Leasing to support small businesses in Romania. The company successfully utilised a €10 million loan provided by the EBRD in August 2016 to support clients in trade, construction and other services.
Matteo Patrone, EBRD Director, Regional Head for Romania and Bulgaria, said: “We are pleased to intensify our partnership with Garanti Leasing after the successful operation in 2016. This new facility continues our cooperation in providing funding to small businesses in Romania. MSMEs are the backbone of the Romanian economy and supporting them will contribute to economic growth.”
Okan Yurtsever, General Manager, Garanti Leasing, said: “We believe in the local business environment and in its development potential, and all our steps thus far have been in support of their activity, having targeted and backed their sustainable growth. Through our new partnership with the EBRD, we are once more reiterating our long term commitment to the Romanian economy and to small businesses in particular.”
The EBRD is a leading institutional investor in Romania. It focuses on promoting stability and expanding products in the financial sector, on strengthening infrastructure through improved efficiency and greater private sector involvement, as well as on restructuring the power sector and increasing energy efficiency and sustainability.
The Bank has invested close to €7.5 billion in the country to date in almost 400 projects. (rbj/03.10.2017)

Foreign Direct Investment in Romania have reached over € 70 billion at the end of 2016

By Edwig Ban

The National Bank of Romania, in cooperation with the National Institute of Statistics, conducted the statistical survey regarding the foreign direct investment (FDI). The major goal of the statistical survey was to determine the FDI stock as of 31 December 2016 and the FDI flows during the 2016 financial year into the resident direct investment enterprises.
The FDI Survey was conducted in compliance with the methodological requirements of the International Monetary Fund Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6).
FDI net flow in 2016 stood at EUR 4517 million, of which EUR 4341 million – equity stakes (enterprises’ equity worth EUR 3203 million, plus reinvested earnings worth EUR 1138 million); EUR 176 million – net credit from foreign investors.
FDI stock as at 31 December 2016 amounted to EUR 70.113 billion, of which: EUR 48964 million – equity stakes, including reinvested earnings (69.8 percent); EUR 21149 million – net credit from foreign investors (30.2 percent).
Income from FDI in 2016
Net earnings from equity participation were EUR 4287 million, representing the net profit of FDI enterprises, tantamount to EUR 7410 million, less the losses incurred by loss-making FDI enterprises worth EUR 3123 million.
Net income from interest computed by subtracting from the interest received by foreign direct investors on loans granted to their enterprises in Romania – either directly or via fellow companies from the interest paid by foreign direct investors for the loans received from their enterprises in Romania – either directly or via fellow companies, stood at EUR 782 million.(rbj/29.09.2017)

The merger between Carpatica Commercial Bank and Patria Bank becomes effective on 1 May

By rbj

On Friday, April 21, 2017, Bucharest Court of Appeal approved the merger file between Banca Comerciala Carpatica and Patria Bank, allowing to the two banks to complete all the procedural and operational steps for the effective implementation of the merger in the very next future. Patria Bank and Banca Comerciala Carpatica will become one bank that will continue to be listed on the Stock Exchange and will be named Patria Bank; The new bank will be present in 73 cities at national level through 111 branches, will have more than 240,000 clients and 3,816 billion lei in assets, focused to increase the access to baking services for Romanian population and to support the local entrepreneurs.

At this point, the estimated date of the implementation of the merger is 1 May 2017, the date being conditioned by the issuance of the court decision confirming the legality of the decisions of the general meetings of the shareholders of the two banks regarding the approval of the absorption merger between Banca Comerciala Carpatica (absorbing entity) and Patria Bank (absorbed entity) and it is ordered the registration at the Trade Registry.

The priority of the two banks is to confirm the date of the merger this week, allowing customers to be informed accordingly and to start the integration of systems and operations.

All the products, services and contractual terms that apply to the clients will remain in the actual form until the date of the merger, afterward the new General Banking Terms will be applied, as previously communicated to the clients.

In order to provide customers with better and transparent information on all aspects of the merger, a web page dedicated to the merger of the two banks has been created since November last year: https://fuziune.patriabank.ro/desflux.

On the dedicated website, as well as on the www.patriabank.ro, updates will be provided in real time, oferring customers all necesary details and timing of the main moments regarding the the merger. More, Customer Service program has been extended between 25.04 – 15.05.2017 (from Monday to Friday) from 08:30 and 20:00, so that customers can get in touch with the bank for any additional details.(rbj/26.04.2017)

Romania’s foreign exchange reserves stood at EUR 34,495 million in February

 width=By rbj

On February 28th, 2017 the National Bank of Romania’s foreign exchange reserves stood at EUR 34,495 million, compared to EUR 34,518 million on January 31st, 2017. During the month, the following flows have taken place: EUR 405 million inflows, representing changes in the foreign exchange reserve requirements of the credit institutions, inflows into the Ministry of Public Finances’ accounts a.s.o.; EUR 428 million outflows, representing changes in the foreign exchange reserve requirements of the credit institutions, interest and principal payments on foreign currency public debt, payments from the European Commission's account a.s.o..

The gold stock remained unchanged at 103.7 tones. However, following the change in the international price of gold, its value amounted to EUR 3,940 million.

The international reserves of Romania (foreign currencies and gold) on February 28th, 2017 stood at EUR 38,435 million, compared to EUR 38,251 million on January 31st, 2017.

During the month of March 2017, the payments due on public and publicly guaranteed foreign currency denominated debt amount to approximately EUR 103 million.(rbj/1.03.2017)

The share capital of Fondul Proprietatea falls by more than 503 million lei

By rbj

The Extraordinary General Meeting of Shareholders (EGM) Fondul Proprietatea decided on Tuesday, reducing the share capital by approximately 503.7 million lei to 5.239 billion lei, according to an announcement published on the website of the Bucharest Stock Exchange (BVB).

Thus, it approved reducing the share capital in Fondul Proprietatea (FP) of about 5.742 billion lei to 5.239 billion lei by reducing the nominal value of shares from 0.57 lei to 0.52 lei.

"The reduction is justified by optimizing capital of Fondul Proprietatea, involving repayment to shareholders of a share of contributions in proportion to the share capital of the Fund. After reduction, the subscribed share capital of FP will amount to 5,238,521,987 92 lei, divided into 10,074,080,746 ordinary shares each with a nominal value of 0.52 lei, "the release said.

Also, it was also decided empowerment, with the possibility of substitution of Grzegorz Maciej Konieczny to sign the decisions of the shareholders and as amended and updated Articles of Incorporation and any other documents relating thereto and to complete all procedures and formalities required by law to implement the decisions of shareholders, including the formalities for publishing and registering them with the Trade Registry or any other public institution.

Fondul Proprietatea SA operates as a closed-end investment company without a set lifetime, incorporated in Romania. The Fund was established by the Romanian Government in 2005 and eligible claimants who lost property under former communist governments were awarded shares in the Fund in lieu of compensation.(rbj/28.02.2017)

Garanti Bank’s Outlook, upgraded to Stable by Fitch

By rbj

International Rating Agency Fitch Ratings upgraded Garanti Bank Romania’s (GBR) Outlook to Stable, and confirmed its ratings. As such, the bank’s Long Term IDR was confirmed to ‘BBB- (Investment grade)‘, its Short Term IDR, to ‘F3’, its Support Rating to ‘2’, and its Viability Rating to ‘b+’.

Fitch emphasized the strategic importance of Banco Bilbao Vizcaya Argentaria’s presence within Turkiye Garanti Bankasi’s shareholding, GBR’s parent bank. "We have a strong commitment on the local market and our strategy is to further develop and grow. Fitch’s recent Outlook revision and afirmation of our IDRs, Support and Viability Ratings confirm our long term plans", stated Ufuk Tando─čan, CEO of Garanti Bank Romania.

Garanti Bank is part of the financial-banking group Garanti Romania, which brings together Garanti Leasing (the brand under which the company Motoractive IFN SA operates) and Garanti Consumer Finance (the brand under which Ralfi IFN operates).

Garanti Bank is held by Turkiye Garanti Bankasi AS (TGB), Turkey’s second largest private bank. TGB is a universal bank with leading presence in all business lines. The bank serves more than 14 million customers in corporate, commercial, SME, and consumer segments offering fully integrated financial services. In 2015, Spanish financial group Banco Bilbao Vizcaya Argentaria (BBVA) gained majority management control of TGB.

Garanti Bank Romania offers a series of quality products and services for all business segments: retail, SME and corporate. Present in Romania since 1998, the bank has developed a solid portfolio of clients and expanded its national presence through branches and alternative channels, reaching an extended network of 84 branches and over 300 intelligent ATMs that can be used by anyone, not just bank customers, for transactions with or without cards.

Garanti Bank was awarded in 2016 by world-renowned magazine Global Finance, as “Best Consumer Digital Bank in Romania”. The distinctions were granted within the “2016 World's Best Consumer Digital Banks in Central and Eastern Europe Competition”.(rbj/2017.02.13) 

National Bank of Romania (BNR): Balance of payments and external debt – December 2016

By rbj

In January - December 2016, the balance-of-payments current account posted a deficit of EUR 4,118 million, compared with EUR 1,943 million in January - December 2015; the goods balance and primary income balance recorded higher deficits, by EUR 1,505 million and EUR 1,087 million respectively, the surplus on secondary income narrowed by EUR 345 million, while that on services widened by EUR 762 million.

Non-residents’ direct investment in Romaniae totalled EUR 4,081 million, of which equity (including estimated net reinvestment of earnings) amounted to EUR 3,899 million and intercompany lending recorded a net value of EUR 182 million.

Long-term external debt at end-December 2016 stood at EUR 69,116 million (74.7 percent of total external debt), down 2.0 percent from the level reported at end-2015. Short-term external debt at end-December 2016 amounted to EUR 23,416 million (25.3 percent of total external debt), up 17.8 percent against end-2015. In the period under review, total external debt increased by EUR 2,098 million, of which the public debt rose by EUR 927 million and the non-publicly guaranteed debt by EUR 1,473 million, while the monetary authority’s debt declined by EUR 302 million. Long-term external debt service ratio ran at 25.2 percent in January-December 2016 against 38.5 percent in 2015. At end-December 2016, goods and services import cover stood at 6.4 months, flat from end-2015.

At end-December 2016, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 90.1 percent, against 97.9 percent at end-2015.(rbj/2017.02.12)

Central bank revises downwards 2017 year-end inflation forecast

By rbj

The National Bank of Romania (BNR) has revised downwards by 0.4 percentage points its inflation forecast for end-2017, which is now projected at 1.7 percent, BNR governor Mugur Isarescu told a press conference on Thursday, on the occasion of the presentation of the central bank's Quarterly Inflation Report. BNR estimates a 3.4 pct inflation rate for the end of next year, 0.2 percentage points above the previous forecast; the target is 2.5 percent +/—1 percentage point. According to the governor, the annual inflation rate was relatively stable in Q4 2016.

"Raw material quotations reinforce their upward trend which is still continuing, yet seemingly not at such a fast rate," Isarescu said, adding that fuel prices have returned to the positive territory.

The central bank head said that although demand for loans in domestic currency remained robust, a slowdown is noticeable, apparently in correlation with "the uneven unfolding of the First Home program.(rbj/2017.02.09)

NBR Board decisions on monetary policy: National Bank of Romania decided to keep unchanged the monetary policy rate at 1.75 percent per annum

*** The projected annual inflation rate retains its upward path. Specifically, it is seen re-entering the variation band of the flat target towards the end of 2017 and climbing into the upper half of this band at the beginning of 2018 to reach higher-than-previously-forecasted levels

By rbj

In December 2016, the annual CPI inflation rate rose to -0.54 percent from -0.67 percent in the previous month, below the forecasted level. This evolution was entirely ascribable to the return to positive territory of the annual dynamics of fuel prices, the impact of which was mitigated by that of the decline in the annual adjusted CORE2 inflation rate . In Q4 as a whole, the annual inflation rate saw a marginal increase (-0.57 in September), slightly below expectations. At end-2016, the annual adjusted CORE2 inflation rate stood at 0.3 percent, compared to 0.6 percent in September.

The average annual inflation rate continued to post less negative values, standing at -1.5 percent in December 2016 (from -1.7 percent in September) on the back of the diminishing statistical impact of applying the reduced VAT rate to all food items; similarly, the inflation rate based on the Harmonised Index of Consumer Prices rose to -1.1 percent in December 2016 from -1.3 percent in September 2016.

The stronger-than-expected deceleration in annual economic growth in 2016 Q3 was ascribable to the slacker advance in domestic demand on account of the slowdown in household consumption and gross fixed capital formation. In the context of a much sharper decline in the growth rate of imports compared to that of exports of goods and services, the negative contribution of net exports to real GDP growth shrank to almost zero. The latest statistical data reveal a further robust annual growth rate of the turnover volume of retail trade in the first months of 2016 Q4 and a faster annual rate of increase of industrial output, with construction posting, however, a steeper decline. Furthermore, the annual dynamics of unit wage costs in industry remained high. The share of leu-denominated credit in total private sector loans continued to widen, reaching 57.2 percent. This certifies a better monetary policy transmission, while also helping mitigate the risks to financial stability.

In today’s meeting, the NBR Board examined and approved the February 2017 Inflation Report, which incorporates the most recent data and information available. The baseline scenario of the projection reconfirms the outlook for the annual inflation rate to revert to positive territory in 2017 Q1, amid the fading out of the impact of the standard VAT rate cut to 20 percent. The annual inflation rate is, however, projected to run at lower levels and its subsequent rise is relatively slower, due mainly to new disinflationary supply-side shocks that emerged from November 2016 to February 2017. They include the price cuts for compulsory motor third-party liability insurance policies and the scrapping of non-tax fees and charges, whose effects add to those coming from the standard VAT rate cut to 19 percent and the removal of the special excise duty on fuels as from 1 January 2017. The projected annual inflation rate retains its upward path. Specifically, it is seen re-entering the variation band of the flat target towards the end of 2017 and climbing into the upper half of this band at the beginning of 2018 to reach higher-than-previously-forecasted levels.

The risks and uncertainties surrounding the inflation outlook stem from both domestic and external environment. Domestically, they originate mainly in the fiscal and income policy stance during 2017. In addition, uncertainties linger as to future adjustments in administered prices, but also to the developments in the general domestic environment. On the external front, still relevant are the risks related to euro area economic growth arising from political uncertainties associated with the elections scheduled for this year and Brexit talks, the divergence between monetary policy stances of the world’s major central banks, and the issues facing the European banking system. In this context and based on currently available data, the Board of the National Bank of Romania decided to keep unchanged the monetary policy rate at 1.75 percent per annum, to further pursue adequate liquidity management in the banking system, and to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.

The NBR Board decisions aim to ensure and preserve price stability over the medium term in a manner conducive to achieving sustainable economic growth. The NBR Board reiterates that a balanced macroeconomic policy mix and progress in structural reforms are of the essence in preserving a stable macroeconomic framework and strengthening the capacity of the Romanian economy to withstand potentially adverse global developments.

The NBR is closely monitoring domestic and external developments and stands ready to use all its available tools with a view to achieving its objectives.(rbj/2017.02.07)

About 6,000 debt discharge notifications at 2016-end, 2% of maximum admissible level

By rbj

The number of debt discharge notifications reached 6,400 at the end of 2016 and the volume of notified loans stands at 1.8 - 1.9 billion lei, taking into account that the pace has dropped from over 1,000 files per month, in the first month since the Law was enforced, to 100 - 150 files per month, over the last months of 2016, Deputy Director of the Financial Stability Directorate within the National Bank of Romania (BNR) Florian Neagu stated on Tuesday.

"If we take a look at the actual statistics, to what is currently happening on the market, we can see that the number of debt discharge notifications at the end of December 2016 was approximately 6,400, and the volume stood at almost 1.8 — 1.9 billion lei. It isn't high, but it isn't low either. (...) If in the first months since the Law was adopted we had over 1,000 notifications per month, over the last months of last year, the average reached 100 — 150 notifications per month, but remains to be seen what will happen, because it just might be a waiting period, and it could start again," Neagu explained.

However, according to the BNR official, the data confirms the initial estimations, according to which hundreds of thousands of cases were to use this procedure. Neagu also explained that, according to the BNR analysis, almost 300,000 debtors would be eligible for debt discharge and the loans volume would be 42 — 43 billion lei.

"This is the extreme case scenario. Making a comparison to what is happening on the market, we established that we have almost 2 percent notifications of the maximum admissible level and the trend shows a significant flattening," the BNR representative added.(rbj/2017.01.31)

Contact
The Romanian Business Journal
Constantin Radut
Editor in Chief
031726 Bucharest, Romania

+40 725 511 887 office.rbjournal@gmail.com www.rbj.ucoz.ro
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