''BRD does not pursue a market share policy, but primarily targets profitabilit''

BRD - Groupe Société Générale is the second bank in terms of banking assets in Romania. With EUR 4 bln market capitalisation (as of 15th of January 2007) BRD - Groupe Société Générale ranks first of the financial entities listed at the Bucharest Stock Exchange and second of all the listed companies. BRD - Groupe Société Générale is deeply anchored in the Romanian economy and the global community through more than 500 agencies and more than 800 ATM. At the beginning of December 2006, BRD counts 2 million active individuals and corporate customers and more than 1.8 million banking cards. BRD is committed to developing its goodwill on three main markets retail banking, corporate banking and investment banking, by adopting a strategy of long-term partnership with its customers.

Mr. Patrick Gelin, what is the market share currently held by BRD in the Romanian banking system, and what is your strategy for improving it in the medium run?

BRD claims an average 19 per cent market share, which we calculate in terms of products and markets. Although BRD does not pursue a market share policy, but primarily targets profitability, we intend to improve our position, first of all by increasing our customer portfolio. In the corporate segment, we will insist on the range of products and services addressing SMEs, which we launched last summer - Ristretto and Simplis Credit; in the retail segment, we will try to improve our position both by launching new products and, more importantly, through service quality and promptness.

What do you think about the project proposed by the central bank last year, concerning the elimination of the minimum 25 per cent initial down payment for real estate credits?

Each bank will act according to its own strategy and taking into account the quality of the applicants’ files. However, given that most real estate credits are granted for a longer term, certain measures must be taken in order to control crediting risks. At the end of the day, competition mechanisms will probably play the decisive part.

What will the year 2007 bring into the Romanian banking system?

The Romanian banking market is increasingly crowded. Institutions that previously focused on the corporate segment are now beginning to look at the SME and retail segment as well; new players have ambitions in the retail market; non-banking financial institutions gain increasing importance, and all banks have made development plans. The main challenge in 2007 will be to reconcile growth and profitability in a highly competitive environment, and at times competitive in a non-rational manner.

I don’t think there will be major innovations in terms of the commercial offer, in exchange the quality of both back and front offices services will be, at an increasing extent, an important selection criterion for consumers, whether individuals or legal entities.

What are the strengths BRD relies on in tackling the challenges involved by Romania’s recent EU accession?

Apart from its complete offer, BRD has the advantage of being part of a major international group. BRD benefits from the expertise gained by Groupe Societe Generale in the European Union, an experience that customers may use in implementing EU co-funded programmes. On the other hand, many of the foreign businesses which invest in Romania have established logistic centres here for the entire region. Societe Generale, which is also present in the entire region, is able to provide development assistance and services at the highest standards.

Considering that other banks have announced their entrance to the Romanian banking market in 2007, do you expect the competition to tighten?

Competition does not scare us: it has always existed, and we have always managed to handle it successfully. The Romanian market is already quite competitive, and I believe the involvement of new players will not entail fundamental changes, either in market structure or in competition intensity.

Nine O'Clock