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The next level for British investors: Romania

The most important financial group in Romania, the leader for transactional services and the bank with the largest market share in terms of assets and number of customers. All these features grant BCR the position of an ideal partner for UK businesses willing to expand in Romania, the fastest growing economy in Eastern Europe.

As the forecast for majority of Central and Eastern European countries shows stable growth, Romania is the fastest growing market of the region. Over the last two years, it achieved a surplus in its trade in goods and services for the first time in the post-communist era, driven by the rapid growth of exports of IT and business services. In Q3 2015 Romania’s GDP increased by 1.4 % comparing to Q2 the same year, which is 0.5 percent higher than for the second faster growing economy, Poland. According to the article "Business risks and opportunities in Romania" published by The Economist Intelligence Unit, the growth of Romanian economy has been predominantly driven by agriculture and supported by industry and the automotive industry in particular. The positive development of the economy was impelled by consumption, but also by increasing investments.

However, entering such a market can be daunting, especially taking into consideration the challenges of the business environment. As reported by the study "Business Challenges of the Romanian Market 2015", the major obstacles faced by foreign companies present on the Romanian market are the frequent changes of legislation (54%), obtaining the appropriate level of support from the authorities (51%), and the implementation of legislative requirements (49%). Nonetheless, most businesses are prepared to confront these challenges as the fast growing Romanian economy provides numerous lucrative opportunities.

 

The corporate perspective

Its unique position as the most important financial group in Romania, including companies on the leasing, private pension and housing bank markets, makes Banca Comerciala Romana (BCR) the ideal partner for UK businesses intending to expand on the Romanian market, especially since the bank is focused on the autochthonous and Moldavian markets (via the wholly owned subsidiary, BCR Chisinau), while offering its abroad active clients financial services and counselling through Erste Group subsidiaries in Central and Eastern Europe.

Moreover, BCR is an active and regular member of the British Romanian Chamber of Commerce, the premier business-led organisation promoting bilateral trade and investment between the United Kingdom and Romania, therefore the bank possesses an in depth knowledge of the challenges posed by British companies doing business in Romania.

By means of delivering of excellence in complete and complex corporate solutions tailoring across products and services, BCR has attained the position of a trusted advisor insofar as corporate clients are concerned. Furthermore,  its profound understanding of the local industry and business specific needs enabled BCR to provide tailored made corporate lending, transaction banking, cash management, treasury, leasing, structured & project finance, capital markets and corporate finance products and services.

As the largest bank operating in Romania, BCR has also the most significant market reach as far as clients are concerned, which means that the bank is able to expand the availability of trade finance for importers in Romania, thus assisting foreign companies developing on the local market.

The interactive approach involving client coverage, along with product and industry expertise, has led BCR to an in depth understanding of the business and industry specifics and risks that its clients are exposed to. Therefore,  the bank is able to identify and offer optimal services to them. This gave BCR with the opportunity to reach and maintain through the years a leading position in all major loans, syndications, bonds, capital markets and corporate finance deals and innovative corporate solutions implemented in Romania, across sectors, with the most preeminent market leader position in the energy & utilities portfolio.

 

The input of BCR regarding financial markets

As far as the local market is concerned, in terms of financial services market share, BCR is one of the top 5 players in transactional services with G-bonds/T-bills both on primary and secondary market administrated by National Bank of Romania as well as in brokerage services offered on the Bucharest Stock Exchange market.

One of most important service in which BCR has proven its expertise and excellence is the custody service on local and foreign markets, as several prizes awarded by the prestigious magazine Global Custodian attest:   6 Best in Class Awards – Agent Banks in Emerging Markets Survey, Domestic Commended,  2012 and 10 Best in Class Awards – Agent Banks in Emerging Markets Survey, 1 Top Rated, 2013. Moreover, BCR has obtained very high scores within the 2015 CEE Region Survey: 7.00 for Reputation & commitment, 6.97 for Fund accounting & valuation and 6.92 for Asset servicing.

 

Transaction banking

As one of the pioneers of receivables finance business in Romania and a member of the largest international factoring & receivable finance organization, FCI + IFG (former Factors Chain International), BCR gives priority to the development of this stream of working capital finance further on by investing into IT solution that will cover the full supply chain. The bank provides solutions that help increase the liquidity in the economy while reducing the inherent risk in local and international trade flows, such as:  export factoring, import factoring, reverse factoring solutions, supply chain finance platform, etc.

Irrespective of whether companies have export or import commercial cooperation with Romanian organizations, BCR is able to present them with a comprehensive package of services that covers financing, administration & collection of receivables, non-payment risk insurance (for both domestic and cross-border trade).

 

A key player in project and infrastructure financing

Being committed to supporting the development of the local economy, BCR plays a strategic role in this respect. Providing financing for infrastructure projects, which allow the fundamental structures for the Romanian economy to function properly and impel it to grow, is one of the main priorities of BCR. Furthermore, the bank targets the financing of healthy and viable investments, especially in developing production capacities in line with Romania’s industry and national strategies, as BCR has gained specific industry know-how in this field.

The bank specializes in providing finance for transformational Capex and Greenfield investments in the energy sector, social and transport infrastructure, other asset intensive industries and, last but not least, for leverage finance transactions.

Since BCR has constantly promoted robust lending principles in the banking sector, one of its main principles is sizing the financing amount based on the repayment capacity of the borrowed companies and always financing based on clearly identified repayment sources. That is why BCR has built a leading position in extending long-term financing on project finance basis, which has proved to provide a much more adequate risk coverage, and has demonstrated its capabilities by structuring loans amounting to RON 4.96 bn, since 2008 when the Project Finance Department was created. Moreover, BCR has supported the acceleration of EU funds absorption as a co-financing bank for EU financed projects, with a significant impact in the SME sector.  

The Energy sector is of key interest for BCR, as it plays a very important role in the competitiveness, sustainable development and energy security of Romania. While developing extensive market know-how, the bank’s commitments in this sector take up approximately 50% of the total portfolio, in both private and public sector, covering all areas of energy production from conventional to high efficiency co-generation, renewables and energy efficiency.

 

The background of the largest bank in Romania

Established in 1990, BCR took over the commercial banking operations of the National Bank of Romania and, in 2006, it became a member of Erste Group, which was founded 1819 as the first Austrian savings bank. Since 1997 Erste Group has developed into one of the largest financial services providers in Central and Eastern Europe, with more than 46,000 employees serving around 16.4 million clients in 2,900 branches in 7 countries (Austria, Czech Republic, Slovakia, Romania, Hungary, Croatia, Serbia).

BCR delivers a full range of financial products and services in most Romanian towns of more than 10,000 inhabitants. As the No. 1 bank in Romania on the cards and banking transactions market, BCR commands the largest national ATM (over 2,200 machines) network, while providing a complex offer in electronic banking services, including internet banking, phone banking and e-commerce services. BCR is also Romania’s most important financial brand, judging by the client trust rate and by the number of persons who consider that BCR is their main banking partner.

Companies looking  for opportunities in Romania and CEE markets can rely on a vast array of support services provided by BCR. The lucrative opportunities are there, and so are the financial tools required. By expanding into this new market and relying on the know-how and expertise developed by BCR, businesses can make Romania work for them.

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