Schreiner, Volksbank: We've adjusted growth plans to 10%, because that's all we can financePublish date: 22-12-2008
Volksbank, which climbed to the third position in the system, sees growth slowing down quite a lot next year, as it anticipates funding provided by its parent bank to halve.
"We had funding worth 1.4 billion euros provided this year. In 2009, I expect about 600 million euros, half of which will go to refinancing the lines that reach maturity," explained Gerard Schreiner, chairman of Volksbank Romania, in an interview for ZF. The bank is funded almost entirely by its majority shareholder, Volksbank International.
Schreiner is the second banker that clearly hints at the reduction of the financing available for next year. Adrian Radu, chief executive of Romexterra Bank, has recently explained that the German group Bayern LB will cut financing provided to its branch to 185 million euros in addition to a 12 million-euro capital increase, compared with 245 million euros plus 10 million euros added to the capital this year.
Schreiner says that the lines of financing raised fall due in more than five years, to allow the balance sheet to achieve some balance, given that the bank has focused on long-term loans over the last few years.
"We will not finance long-term loans from resources raised for short term even if it means that in a few years from now we will be paying higher than the market average interests for the financing raised," Schreiner says. Volksbank's boss notes that the bank is now getting funds from its shareholder at an average margin of three percentage points above the EURIBOR, three times higher than last year.
On the other hand, Schreiner says that the 600 million-euro amount is part of a worst-case scenario. The best-case scenario would have international markets calm down in the second half of 2009, which would allow Volksbank to raise higher amounts of cash at better interests.
With financing going down, Schreiner says that the bank's business will only increase by 10-15% in 2009, compared with an average pace of 30-40% over the last few years. The bank had 3.3 billion euros in credits granted in its portfolio at the end of November.
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