Romanian Daily

8 mln Bank Cards in Circulation

IulianBulandra — 2006-07-27T10:25:00+00:00

Almost.8 million bank cards are currently in circulation in Romania, according to figures provided by the National Bank (BNR), according to ING Financial News The increase rate in the first four months of this year was 158,000 cards a month, compared to 94,000 cards a month in the same period a year ago.

Bucharest accounted for 24 percent of the total number of cards at the end of April, up from 22.5 percent in April 2005 and 20.2 percent in April 2004.

A growing number of Romanians prefer to make payments by cards, which mainly include Visa, MasterCard and Euroline.

Transactions recorded at retail shops have grown by 105 percent to about eight million, while their value amounted to 455 million dollars, a 127 percent increase compared to the end of April 2005.

The overall value of transactions - both at ATMs and retail shops - has reached 5.4 billion dollars, marking an annual increase of 68 percent. There were 64 million such transactions at the end of this April, a 27 percent rise on end-April 2005.

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Phishing Attempt on Card Owners Uncovered

IulianBulandra — 2006-07-27T10:23:00+00:00

Romanian Softwin company's data security division BitDefender and the IT experts of the Romanian Commercial Bank (BCR) uncovered early on July 18 a phishing attempt - i.e. an attempt to steal personal data - targeting the owners of cards issued by several Romanian banks, according to Rompres and ING Financial NewsThe method involves an email apparently sent by a bank, a big company or a state institution to its clients, asking them to enter a Web site and re-introduce their personal data (personal numerical code, the bank card and PIN, online payment accounts and their passwords).

In this case, the users got an email message apparently issued by the BCR asking them to enter a special Web page, where they were asked to disclose their card number and PIN and the issuer bank.

The message, while ingenious, has many grammatical mistakes, which indicates the hackers might not be Romanian.

The Web site strives to be convincing, and it features Visa, MasterCard and BCR logos; it also contains a form by which the owner of the card - supposed to be issued by banks like BCR, Ion Tiriac, Alphabank, Carpatica, Transilvania, Eurombank, Citibank and HVB Bank - is invited to disclose his/her personal data.

The whole scheme relies on the card owner's fear that money from his/her account might have been spent without his/her knowledge.

In order to prevent possible cyber-attacks, the users are advised not to click on a message link and be careful whenever they receive any kind of messages related to financial activities, apparently sent by the banks, since most banks clearly explain in their policies that they will never send emails asking for personal data.

Phishing causes more than 50 billion dollars in damages worldwide a year.

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Long-term loans in RON boom

IulianBulandra — 2006-07-27T08:29:00+00:00

Long-term credits in RON taken out by the population have surged, increasing their volume almost eight times in the last 12 months, to 7.31 billion RON (equivalent to just over 2 billion euros), at the end of May. The quick growth of funding in RON occurred at the expense of lending in foreign currency. In May, funding in RON exceeded foreign currency lending for the first time. The volume of long-term credits granted in foreign currency went up by just 60%, reaching a sum equivalent to 7.28 billion RON (some 2 billion euros). On the other hand, the rapid expansion pace in relative terms was also due to the very low comparative base that was the starting point.

The last few months, however, brought a speeding up of the growth pace, even in absolute volumes. The NBR includes under these categories credits granted for periods of time longer than five years. Lately, an increasingly high number of banks have started to extend the maturity of personal loans to close to 10 years, therefore these credits also fall into this category. On the other hand, at the beginning of last year, the banks launched a hybrid product - the home equity loans, which allow for very high-value funding (approaching 100,000 euros) to be granted, with very long maturities of up to 25 years.

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Cyprus offshore to make offer for Romexterra on behalf of MKB

IulianBulandra — 2006-07-27T08:12:00+00:00

An offshore company with unknown shareholders will make an offer for Romexterra Bank's shares as part of Hungarian MKB Bank's attempt to take control over Romexterra. Demera Investments Limited, registered in Cyprus, will offer Romexterra shareholders 6 RON/share according to a copy of the stock sale-purchase contract the bidder will propose to the shareholders of the bank. The transfer of the shares from those shareholders deciding to sell will be on condition of the signing of contracts to buy stock up to 50% plus one share in Romexterra until November 1. After this condition is met, the bank's shareholders who subscribe during the offer are to get their money for the shares sold, minus the interest for possible gains from this transaction.

According to the statements by the Romexterra officials, all the shareholders are supposed to get the same price. Adrian Manaila, an offshore companies expert, says the main benefit companies registered in Cyprus have is confidentiality, with the final beneficiary of the operations they conduct remaining unknown. The tax on profit of Cyprus-registered companies is currently 10%, higher than in other tax havens. Under the contract proposed to shareholders, Demera "will buy during the collection process shares issued by Romexterra," without becoming a significant shareholder in the bank and "will convey the shares therefrom obtained to the Strategic Investor (MKB Bank i.e.) or to any of its affiliates."

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Romania, 3rd in the region in retail crediting

IulianBulandra — 2006-07-27T07:56:00+00:00

Romania placed third in a ranking of Central and Eastern European countries with the best prospects for the development of the retail crediting market. The first two spots were occupied by Russia and Serbia. The study was carried out by UniCredito bank and quoted by Reuters. The Italian bank estimates that credits granted in Romania in the retail sector will increase by 38 percent annually, over the next three years. UniCredito believes that the credits granted to the retail sector represent the growth engine of the banking sector in the region.

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Government approves the final act of BCR's privatization

IulianBulandra — 2006-07-27T07:52:00+00:00

The government promoted through an emergency ordinance stipulations included in the law project regarding the completion of the privatization process of the Romanian Commercial Bank (BCR), said Minister of Public Finance Sebastian Vladescu.

The measure was necessary because otherwise the conditions agreed upon with Erste could not have been fulfilled until the September 21 deadline, when the privatization process must be complete. "The Competition Council has been notified and we hope that we will have an answer before the deadline," said Vladescu. He said that on August 4 BCR's General Shareholders Assembly (AGA) will meet in order to approve the privatization conditions. Vladescu said that the potential state subsidy in the Bancorex case, a bank taken over by BCR in 1999, is estimated at more than 900 million euros. Bancorex went bankrupt and was bought together with BCR, which had taken it over, by the Austrian Erste Bank. "Looking at the data we have so far, the possible state subsidy exceeds 900 million euros, but are not completely confident about this figure," Vladescu said.

At the end of last year, Erste Bank won the bidding for the BCR takeover, offering 3.75 billion euros for a 61.88 percent stake in the largest Romanian Bank. The acquisition of BCR by the Austrian group Erste Bank was the sixth most important transaction operated on the European financial services market in terms of value, according to a study conducted by consulting firm PricewaterhouseCoopers. According to PwC, the price paid by the Austrian bank for the BCR takeover reflects the advantages Erste Bank will have as a result of this transaction, namely a large exposure on an emerging market, the takeover of a 300 branch network, 2.5 million personal accounts and 300,000 corporate accounts.

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Millennium BCP to enter Romania

IulianBulandra — 2006-07-27T07:14:00+00:00

Millennium BCP bank plans to submit to the National Bank of Romania (BNR) an authorization request for the creation of a credit institution in Romania, according to Paulo Texeira Pinto, the president of the bank's Executive Director's Council.
"Regarding Romania, we reaffirm our interest in launching a greenfield investment and we are presently preparing the necessary documents that will be submitted to the local authorities for obtaining the licenses and authorizations," said Texeira Pinto. The Portuguese bank was one of the two finalists in the race for the takeover of the Romanian Commercial Bank (BCR).

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Allianz-Tiriac Posts 37% Growth in Jan-May'06

IulianBulandra — 2006-07-26T09:16:00+00:00

Insurance company Allianz-Tiriac posted underwritten gross premiums worth 128 million euros in the first five months, an increase of 37 percent from the same period in 2005, with the trend driven by the comprehensive car insurance policy segment and by the growth on the life insurance segment, ACT Media news agency reports

Allianz-Tiriac intends to break down the comprehensive policy client portfolio into segments depending on the client profile and history with the company.

As for the general insurance segment, Allianz-Tiriac underwrote gross premiums worth 115 million euros in the first five months of the year, an increase of 31 percent from the same time in 2005.

The growth of the life insurance business was 126 percent, to 13 million euros, company representatives stated .

Besides the doubling of the life insurance business, the other segments that helped achieve 37 percent growth in the first five months were car policies, home insurance and the contract to insure Tarom's fleet, the company said.

The increase in sales of non-mandatory auto policies (comprehensive car insurance policies) by 29 percent in the first five months of the year is not the news the management of Allianz-Tiriac would have wished for.

Last year Allianz-Tiriac had a 36 percent share of the comprehensive policy market, with this type of insurance accounting for 60 ercent of its portfolio.

"This share does not make us that enthusiastic, because we do not have a balanced portfolio. Still, this is the trend of the market," daily Ziarul Financiar quotes Cristian Constantinescu, Allianz-Tiriac Asigurari's chief executive, as saying.

"The situation on the auto insurance market is bleak and unacceptable for any insurer," he says.

The rate of claims settled for Allianz-Tiriac's individual clients exceeded 103 percent last year, which means the claims the company settled were 3 percent higher than the premiums it collected.

In other words, the company lost money on the segment of comprehensive car insurance sold to individual customers.

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BNR changes crediting rules

IulianBulandra — 2006-07-26T08:46:00+00:00

Non-banking financial institutions (IFN) will be forced to comply with the settlements of the National Bank of Romania (BNR) included in the prudential stipulations regarding the crediting of the population. By applying this measure financial leasing for the purchase of real estate properties by individuals will be included in the credit category.

The project proposes the financial leasing for individuals, destined for the purchase of goods (including vehicles), to be treated in the same manner as the consumer credit.

Leasing companies will be forced to comply with the measures imposed by BNR and to respect the limits introduced by the central bank regarding prudence measures.

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Raiffeisen fails to qualify for final stage of CEC privatisation

IulianBulandra — 2006-07-26T07:47:00+00:00

The Austrians at Raiffeisen are out of the race for the privatisation of CEC (Savings Bank). They bid less than the Greeks at NBG and the Hungarians at OTP, who will be battling in the finals to take over the fifth-largest Romanian bank.

"After analysing the bids and assigning a score according to the agreed scale, only two banks are left in the competition. The finalists are, in alphabetical order, the National Bank of Greece and OTP Bank," Sebastian Vladescu, Finance Minister and head of CEC's privatisation committee announced yesterday.

Although he declined comment on the value of the two bids, Vladescu said, "since we're going ahead with the privatisation process, the bids must be within acceptable limits.

" Vladescu seemed pleased with the financial bids submitted by the two final banks. The Finance Minister explained Raiffeisen did not qualify because the score its bid got was at least 10% lower than the last (qualifying) bid. Mediafax news agency quoted sources close to the privatising process that say only one of the two bids that made it into the finals exceeded 500 million euros. A 500 million-euro bid evaluates the bank at 715 million euros.

The state is selling 69.9% in CEC as part of the bank's privatisation process, a stake that includes the 9.9% of the Property Fund, for which this fund will get the cash equivalent once the money from the privatisation is collected. In a move that is unrelated to the competition involving only NBG and OTP now, the state will sell 5% in CEC to the bank's employees and to all those retired employees whose last place of employment was with this lender.

"OTP Bank submitted a fair and realistic bid for the acquisition of the 69.9% in CEC," stated Laszlo Wolf, deputy chief executive of OTP, the largest Hungarian bank. Wolf says the Hungarian bank's management welcomes the announcement about making it into the final stage of the privatisation. The National Bank of Greece, the other finalist, had not provided any comment by the time the story was ready for print.

The two finalists will begin talks for the final version of the privatisation contract on Tuesday, August 1. The talks should be finalised on August 23 and the improved financial bids submitted on August 31 will decide CEC's winner. The announcement about who takes over the CEC will be made at the end of next month, if the proposed schedule is kept, Vladescu specified. "Our long-term development goals will be attained by organic growth; CEC was an interesting opportunity for us, but we have other options, as well," Steven van Groningen, chairman of Raiffeisen Bank Romania says. He added the Austrian bank has opportunities to grow faster than the market average in Romania and that Raiffeisen Bank would continue to be a first rate player on the market even without buying CEC.

The bids were opened on the first floor of the Finance Ministry yesterday at 12 p.m. Only the 11 members of the privatisation committee were allowed into the room, along with two representatives from each of the bidders.

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