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“We understand that this is a period of populism. I think there are other more important issues than the legislation dedicated to the banking system. We risk committing the crime because, for example, we have not passed legislation on money laundering. We will comply with this law ( of the payment, recently promulgated-n.red) Obviously, we will respect it, and when misunderstandings arise, we will resolve them through Justice, “said Steven van Groningen, CEO of Raiffeisen Bank, at the meeting with journalists on Thursday, on the occasion of the presentation of the bank’s financial results.
When asked how only one MP developed the local financial system, van Groningen explained: “Now we see that the public-Parliament-Parliament-private-sector consultation mechanism is not working. Why? Because we don’t have a structure to meet regularly. In fact, we are not a democracy. We take certain things from a democracy: that whoever wins the elections, in the next 4 years will do what they want. This is not democracy. ”
That is what I have known for a long time. There is a legislative process that goes through the plenary of the Economic and Social Council. Let’s now look at a discussion of what we do after being in a state of emergency. Obviously, there are many aspects related to labor law. It is normal for employers, union and employer structures to agree on a text on principles and then to agree with the Government in a tripartite agreement. But we fail. Why? Because we do not have a structure in which we meet regularly. In fact, we are not a democracy. We take certain things from a democracy: that whoever wins the elections, in the next 4 years will do what they want. This is not democracy. Democracy is when it has a structure in which it debates the things that are important in society.
What did Steven van Groningen say on Thursday?:
- Democracy is when it has a structure in which it debates the things that are important in society. What is more important: protect those who are vulnerable to coronavirus infection or maintain jobs and economic capacity? This is a debate that is now taking place in many countries, for example. In Romania we still have a problem with trust in society and I don’t think you need me to say it..
- Regarding the legislative projects dedicated to the banking system: “We analyze and move on. We must ask ourselves whether or not what we do helps to solve the problems we face. Here we already have something that does nothing to resolve the crisis. We will take care of that too, no problem. You can also reflect on whether the legislation has a beneficial effect on the cost of credit in Romania or who the beneficiaries are.“
- But the banking system may not be an exception. Now we see that the public-parliament-parliament-private sector consultation mechanism is not working. That is what I have known for a long time. There is a legislative process that goes through the plenary of the Economic and Social Council. It is normal for employers, union and employer structures to agree on principles which can then be agreed with the Government by tripartite agreement. But we fail. Why? Because we do not have a structure in which we meet regularly.
- In fact, we are not a democracy. We take certain things from a democracy: that whoever wins the elections, in the next 4 years do what they want. This is not democracy. Democracy is when it has a structure in which it debates the things that are important in society. What is more important: protect those who are vulnerable to coronavirus infection or maintain jobs and economic capacity? This is a debate that is taking place in many countries, for example. In Romania, let’s not forget that we have a problem with trust in society and I need not say that.
- But maybe that’s what you want. That seems to be the direction we are going. For Romanians to open a digital account in another country. Then all the savings go to other countries, and when we need credit we turn to banks and financial institutions in other countries. If that’s what you want, then yes. But here we need discussions. We need to have a serious discussion about the bills, to see what problem that law solves, what economic impact it has. Let’s discuss the project with all the social partners.
- I hope to emerge from the crisis with a stronger dialogue between the structures that exist but are not used: the structures of the employers, the unions and the Economic and Social Council.
On GDP and exchange rate predictions
Mircea Busuioceanu: “There are many forecasts that show negative growth in 2020. Our official forecast is a contraction of around 7% followed by an increase next year, probably close to 5%, so that by the end of 2021 or perhaps 2022 will lead us a The level we saw in 2019.
Obviously, there is a high degree of uncertainty at this time for macro forecasts, and I think it is a somewhat explored territory that the effects of a health crisis on the economy, in addition to what we could anticipate for purely economic reasons.
Regarding the evolution of the exchange rate, our economists expect a slow depreciation of the leu, probably by a few percentage points. I think we can talk about a correction in appreciation in real terms of the leu that we have seen in recent years, but we do not expect a dramatic evolution in terms of currency depreciation.“
On the evolution of the NPL: “We were expecting a moderate deterioration in bad and delinquent loans in 2020, with 2021 really being the tipping point. It depends on a number of factors related to the performance of the economy and other factors related to market performance. I would like to remind you here that Romania currently has unfriendly legislation regarding the delinquent loans part. There are these surcharges in case of sale. There is a fairly poor performance of the insolvency institution. So, from this point of view, there is still room to improve the market infrastructure and avoid the formation of NPL accumulation.“
About the Pyme Invest program
“We have about 3,800 applications that we have received. We do not have any applications approved or rejected yet because we are in the process of processing them. Our recommendation is that applicants keep in mind that this is public money. In other words, their plans should be realistic and to be in line with the business that has been up to now. We have noticed that many clients request amounts much higher than their usual businesses. And it is difficult to think that in the next period we will have a growth of the business 4 times greater.
Cristi Sporiș: What I can add is that for corporate clients, since we have defined new companies with an annual turnover of more than 5 million euros, there are 230 applications and the total financing for these 230 clients is 1.5 billion lei. This program is intended to be a support program for the SME sector. But there is no money awarded as a grant or state aid. Precisely for this reason, banks are asked to judge each case separately and to lend it according to sound lending principles. In the corporate part of Raiffeisen we maintain the same credit criteria as before. We do not consider this, the guarantee, as a way to throw money from the helicopter. Each case will be judged on the sustainability of the business model and the need for cash flow for the requested loan. If there are companies whose need for financing is one million euros, which in any case could not represent 20-25% of their turnover. Under no circumstances will we seek to give more than that. Because in the end there must be an object of credit and there must be in the future when things improve the ability to pay these loans because more than once it is public money and then we must be more responsible for how we handle these money
Raiffeisen Bank’s total assets exceeded 48 billion lei as of March 31, 2020, an increase of 18% year-on-year. Operating income increased in the first quarter of 2020, being 636 million lei, compared to 615 million lei, in the first quarter of 2019. Net profit decreased by 21%, to 140 million lei, in the first quarter of this year, compared to The similar period in 2019, when it was 178 million lei, according to the results presented on Thursday.
The bank’s total loan portfolio reached 29.2 billion lei in the first quarter of 2020, an increase of 10% year-on-year. New term loans granted to the bank’s clients increased by 20%, growth was balanced across all client segments. Deposits attracted by clients’ Raiffeisen Bank advanced by 21% (year-over-year), exceeding 40 billion lei, on March 31, 2020, once again demonstrating the trust the bank enjoys in its clients.
The money’s operating expenses did not vary much compared to the level recorded last year: 367 million lei (363 million lei in the first quarter of 2019). As expected, spending on occupational health and safety has been on an upward trend since March 2020. In addition, during this period, the bank’s investments and efforts for digital transformation have intensified, offering both employees as well as digital alternative clients to carry out their activity, respectively, to access the bank’s financial services.
Raiffeisen Bank has exceeded the threshold of 700,000 digital customers using the Smart Mobile and Raiffeisen Online applications. The way banks work with customers is changing even faster now. The volume of online payments made by debit cards by individuals increased by 70% in March 2020, compared to March 2019. Bank customers are increasingly opting to pay bills through digital channels, a trend especially demonstrated by the 40% increase in the number of electronic payments to suppliers. In addition, in the case of trading with bank cards in shops, significant increases of two digits can be observed, both in number of transactions and in volume. In the new context of the pandemic and because commerce through electronic channels should be encouraged, Raiffeisen Bank has taken measures to eliminate POS fees for merchants, since March 16, for a month and a half.
Raiffeisen Bank continues to be the market leader in credit cards with 530,000 active cards as of March 31, 2020, and more than 90% of the amounts traded through these cards are used at points of sale or online purchases.
“At this time it is difficult to speak only of numbers. It is very important for us to make sure that we continue to serve our clients, that we offer them the correct solutions and that the personnel of our offices is well protected, beyond any financial result. It is that’s why for two months we have been working hard and taking steps to help customers, from postponing fees to not moving to the bank to collect their card and working from home for a significant portion of employees. The bank has already become on a routine basis. As we see it now, we will continue to be concerned about our physical health, but also about our financial health to return to a normal life. But it is clear that everyone has learned and is learning new lessons during this period. ” said Steven van Groningen, president and CEO of Raiffeisen Bank.
In the context of the coronavirus pandemic, Raiffeisen Bank has taken steps to protect its employees and support customers, suppliers, and the state. The bank postponed the payment of installments of up to 3 months for approximately 21,000 loans, and this was a solution offered by the bank immediately after a state of emergency was declared. Following the adoption of GEO37 / 2020, Raiffeisen Bank has collected an additional 27,000 requests to suspend fees, and these requests are either resolved (21,000) or processed.
Corporate clients and SMEs were contacted to see what their situation was and to find the right solutions together, if necessary. Priority was given to companies in the industries most affected in the short or medium term by the health crisis. More than 2,500 SMEs have already received support by postponing credit rates, extending lines of credit or other necessary measures. The bank also began lending to the government’s SME Invest program. Furthermore, the Factory by Raiffeisen program dedicated to financing new companies has been expanded to include ideas that can contribute to society during this period and we already have more than 310 registered projects.
The bank paid more than 100 million lei in March, representing payments to suppliers and partners, as well as taxes and fees to the state. The bank continues to take steps to help maintain jobs in the economy by all means, restart affected businesses and support those facing difficulties.
The employees of the Central Administration and the agencies have been protected and supported in such a way that until now we have reported 0 cases of infection in the bank. Since mid-March, the bank has provided disinfection of workspaces, protective materials, masks, gloves, or protective panels.
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