Ufuk Tandoğan is CEO of Garanti Bank Romania, a financial institution with a customer-centered strategy and a long-term commitment to the Romanian market. The year 2018 is a milestone for Garanti Bank. It marks two decades of solid presence on the Romanian market, twenty years during which Garanti Bank has succeeded to grow year-on-year in a healthy manner.
Looking back, how would you characterize the bank’s evolution in these twenty years of presence on the Romanian market?
I must say that for us it is a great accomplishment to have been present on the local market for 20 years, with a healthy and strong development path. We started operating on the local market in 1998 as a branch of a foreign bank. At that time, there were 42 active financial players in the Romanian banking system, whereas at the end of last year only 10 of them were still standing. Garanti Bank was one of them.
We transformed into a universal Romanian bank in 2010, three years after we established our business lines – Retail, SMEs and Corporate. We grew year-to-year above the market average. Back in 2008, for example, we were the 23rd bank in Romania. Now we are a bank of systemic importance, one of the ten biggest financial institutions on the local market. With a business model that has proven to be sustainable, we have managed to grow our loans market share to over 3% and our deposit market share to 2.6%. Moreover, we have reached a market share of almost 6% in credit cards, and we increased our market share to over 6.5% when it comes to the number of POSs.
Ever since the beginning of our operations locally, our strategy has targeted a healthy development of our market share and portfolio. As a result, last year has been the best performing year in Garanti Bank’s history in Romania, when we registered a RON 109.7 million net profit and revenues of RON 504.3 million, while growing our asset volume by over 11%, exceeding the Romanian banking market average.
How would you evaluate the local banking system over time?
Every system has its own challenges and opportunities, depending on several macroeconomic factors. If 20 years ago, when we came to Romania, the system was characterized by a growing number of financial players, nowadays I would say that the focus lies on consolidating the banking system’s strength and health rather than its size. As such, we currently have a low NPL ratio, which is diminishing year after year, and impressive overall results. The system’s biggest pluses currently lie in the fact that it is very well-regulated, monitored and governed, while being well capitalized and having a good solvency ratio. The National Bank of Romania (NBR) has done impressive work stabilizing the economic and financial spectrum during volatile times.
Where do you see Garanti Bank in the future?
We continue to have a long-term strategy in Romania, that can surely be regarded beyond the near future. Not only we have built a solid and profitable business model, clearly centered on both customers and employees, but we have also consolidated a strong reputation and brand name in the market. As a proof, earlier this year, Garanti Bank has been named Superbrand, distinguishing itself from a list of over 1,500 brands analyzed by Superbrands Romania. This confirms that our efforts and work have paid off. And, most certainly, we will not stop here. We aim to generate further added value to our clients’ lives and the local economy for many years to come. Our objectives will continue to focus on maintaining a healthy portfolio, being a trustworthy financial partner to all clients, across all business lines (Retail, SME and Corporate), and increasing profitability in a sustainable manner.
Ever since its market entry, Garanti Bank has accustomed its clients with innovation. What strategy will you adopt on this segment in the future?
People need and want to have everything accessible with just a phone swipe. For the short term, our strategic focus regarding this topic will be on upgrading and consolidating our mobile banking application, Mobile ME, for both iOS and Android operating systems, and our online banking service, Garanti Online, which we actually relaunched recently in an upgraded, more user-friendly form. The new Garanti Online platform offers an intuitive interface, an easier to use menu, and simplifies the steps a user must follow in order to perform operations. All menus now have a uniform, optimized design, all while bringing forward the more modern, digital-oriented spirit of banking.
We are compelled to constantly work on new functionalities, for all our products. In 1998, we brought to Romania a customer-oriented business model, reinforced by advanced technology and innovation, perfected subsequently by our majority shareholder – Banco Bilbao Vizcaya Argentaria (BBVA). As a matter of fact, BBVA was recognized last year by Forrester Research as having the best mobile banking app in the world, in a ranking of mobile service offerings from 53 banks across the Globe.
We ourselves, at Garanti Bank Romania, are recognized and awarded year on year, for the past ten years, by the world-renowned magazine Global Finance, as “Best Consumer Digital Bank in Romania”. We are proud to receive 11 such awards, including this year, which signifies an important recognition of our leadership and contribution to the digitalization of banking in Romania.
We believe that harnessing the power of the Internet and mobility will continue to be the main trend in our industry.
How do you see the evolution of Romania’s economy? What’s your forecast?
Romania’s economy is still growing, although the pace has slowed down. For this year, we estimate that Romania’s GDP will spur 3.8%. I am optimistic as there are a lot of sectors of the economy with great potential, especially constructions, as infrastructure works will have to be a focus in the medium term. Romania has also a highly qualified work force especially in the IT sector, the labor costs are still competitive, and the country has many natural resources – fertile agricultural land, oil and natural gas.
What are the advantages of investing in Romania?
Romania is currently expanding at the fastest growth rates in EU, while still maintaining its macroeconomic stability. The country has a highly skilled technology workforce, good cost-quality balance, top-tier investors and a friendly business environment. An important growth pillar is skilled labour, while emphasis on education can increase overall productivity. Also, labour force participation is increasing, while overall labour costs are still very competitive. Another main advantage is the banking system, which is very well-regulated, monitored and governed, and puts great emphasis on the development of the economy. The banking sector has more opportunities than the region due to the 18% in GDP lending gap, while being very well capitalized.
For the medium and even long term there is the potential for constructing a denser highway network while agriculture could use even more efficiently the large fertile land. One other important advantage is the EU membership, which ensures a gateway for many investors, to better penetrate the European markets.
There are many things that can be done and many areas where Turkish expertize can make a great difference.
What are your suggestions for Turkish business people and investors that wish to come to Romania?
There are many successful Turkish businesses operating in Romania in all sectors, from industry, production, technology and services. Garanti Bank can be regarded as an example of how Turkish businesses can grow in time. We are a living and functioning Turkish landmark that stands proof in this sense. We have been activating on the Romanian market for almost 20 years. We grew organically within this timeframe, building a solid client portfolio and a strong branch and ATM network nationwide. We may have started small, but we grew into a systemically important bank. We are a bank of systemic importance, the 9th in the local banking system by assets, as of June 2018, and in the long run we plan on consolidating our position and continue to be a trustworthy financial partner for our clients.
As a matter of fact, if you are a Turkish investor, with a business plan that includes developing outside the Turkish borders, Romania is among the first markets to be considered. Garanti has an important and strategic presence here, and you can be sure of the fact that you will have a strong and knowledgeable financial partner by your side, every step of the way.