How do you evaluate the activity of EximBank in 2011, in the context of the evolution of Romania’s banking system as a whole?
2011 was a year of economic uncertainty, with major changes on international markets, dramatic adjustments in the estimations of economic performance of states, and various institutional, even individual challenges.
EximBank is an institution meant to enforce the economic policy of the government, so our whole activity is dedicated to this general objective, with the bank acting in two directions: in the name and on behalf of the state, and in its own name and on its own behalf. As a consequence, apart from the standard financing products specific to any commercial bank, EximBank also avails of instruments that can help active companies in the fields set as priority by the government’s economic development strategy.
For EximBank, 2011 was a year of constant effort aimed at meeting the demands of the business environment, by diversifying our offer and by increasing the flexibility of our internal working procedures, and the results were prompt to appear. Thus, at the end of October, the bank’s total exposure was 30 pc higher than at the end of 2010, while the volume of guarantees provided in the first 10 months of 2011 advanced by 43 pc against total performance of 2010. Our main target is not similar to that of commercial banks – i.e. making profit – because it is about efficiently using the funds for real economy and working businesses, so that we play a part in the sustainable development of Romanian economy. To give you an example, this is why we chose to develop programmes jointly with the National Association of Exporters and Importers in Romania (ANEIR), with the purpose of organising meetings with entrepreneurs from all over the country, in order to show them how the bank can support the development or operations of local companies. We also became more interested in entrepreneurship education, which we see as essential for the economic future of the country, and – among others – got into a partnership with the Romanian Banking Institute, which introduced the working procedures of EximBank in one of the training modules it offers to companies operating in foreign trade sector and banking system. As another proof of how open we are to the collaboration with commercial banks, we organised meetings with their representatives from various areas of the country, aimed at facilitating the dialogue and getting banking counselors familiar with the specifics of EximBank operations and of our products that are complementary to the offer of commercial banks, so they can provide customers with complete financial solutions.
I consider these are just a few examples showing that EximBank, like all economic players, sought and identified the most appropriate business strategy allowing it to adapt to the new economic and financial context dictated by the economic crisis. Companies understood it, approached us with much confidence, and performance started being reflected by financial figures.
With all these in mind, I am confident that the results of year 2011 will be positive and the bank will maintain its upward trend established these years.
What were the main challenges the bank had to address this year, in its relations with customers, authorities and other partners?
I would say that the main challenge was changing the way the business environment – even the banking system – perceived EximBank. Entrepreneurs were hesitant about resorting to us, because the public was still seeing us as “the exporters’ bank.” However, this is only partly true now. Indeed, the bank started as an export agency, but its activity object has broadened through the years. Now, EximBank can provide its products and services to any type of firm, be it SME or big company, exporter or not. Many of our recent customers confessed that, initially, they were reluctant to work with us – a state-controlled bank. Gradually, they found out that they can work with us same as with any other commercial bank in the market. As for commercial banks, we considered that we needed to run a project aimed at communicating with them, because – here too – EximBank was perceived strictly as a rival. However, EximBank has products that can advantageously complement the offer of other commercial banks – such as guarantees or insurances.
What do you see as “drivers” for a possible positive economic performance of Romanian economy in 2012?
Our current activity gives information about the dynamics of our country’s business environment. For example, we could see the reaction capacity of entrepreneurs trying to resume the contacts they had with partners outside the European Union, to diversify their collaboration with companies from other regions of the world, so they become less dependent on European markets and mitigate the negative effects of economic turbulences upon their businesses. Moreover, one should not forget the importance of doing business on European financing, this being a zone that can partly sustain economic recovery in the country. I consider that, in the future too, exports and a consistent approach of the investment policy, also by an accelerated process of attracting European financing, will support a positive performance of national economy.
How do you see the prospects for 2012?
First, I think there will be more uncertainty that will further “challenge” us to use all the resources we have with extra care and inventiveness. As we can see even at this end of the year, there is doubt about eurozone countries being able to cope with the crisis, and the global ambitions of European policies are fading accordingly. For the states outside this zone, challenges are equally big, but I do not think that we should lose confidence in our capacity to face the obstacles.
In fact, EximBank plans to consolidate its offer aimed at companies and commercial banks, and to target with its products the commercial companies that maintained their position in the market, even under the impact of the economic and financial crisis. Such an example is extending the validity of the product named ‘Interest rate partial offset,’ which belongs to the ‘de minimis’ aid category and allows companies to recover up to 50% of the interest rate paid for investment loans engaged in RON with any commercial bank. The validity of this state aid scheme was due to cease by the end of the year but it was prolonged for the next two years, allowing the economic operators to curtail interest rate costs incurred by investment loans.
The business model implemented in EximBank is sound and efficient – a profit over RON 300 M in the last two years and a half – and will allow us, in the future too, to use the very high potential of this bank. We have funds and we are open to financing, guaranteeing or insuring the projects of local companies, and the only condition for our real support is the sustainability of projects. Our bank has understood the challenges of the difficult economic times we are going through, and can position itself as a valuable partner for any type of business meant to overcome the inherrent hardships of this difficult economic moment.