Q: The first quarter of 2015 brought an unexpected GDP increase of over 4% compared to Q1 2014, exceeding the most optimistic estimates made by analysts and authorities. Do you think that is a trend that may continue in the rest of the year? Give us your personal opinion on the evolution of the Romanian economy in 2015.
George Georgakopoulos:The GDP increased level recorded in the first quarter of 2015 comes after the more moderate but continuous growth registered since 2011. It represents a positive sign that Romania overcame the period of economic difficulties it was facing and is now following its clear path of growth, due to a gradual recovery of the domestic demand and intense export activity. I personally think Romania has many strategic advantages such as educated workforce, still relatively low cost base and a strategic geographical position, to name a few. In this context, the likely chances are to attract more and more foreign investments and to become stronger and more competitive as an export country.
Q: Which are the main engines that could sustain a more important growth this year and beyond?
George Georgakopoulos:I believe Romania has a major advantage as the macroeconomic environment seems to be favorable; the challenge is to find the appropriate way to maintain a sustainable economic growth.
The main triggers will continue to be the consumption and, to lesser extent, the private investments, which slowly assume again its active role in terms of funding. However, the growth sustainability depends on several other aspects. Firstly, an important factor will be the volume of investments, both in the private sector – with focus on the productive areas – and in the public sector, by achieving higher levels of EU funds absorption.
Secondly, the way Romania will capitalize its export perspectives, under the favorable context of European economic revival is a key to further developments. Finally, the lending re-launch, considering that we benefit from a stable and highly liquid banking system, will fulfill its role in supporting the economic growth of the country. And let’s not forget that the country is a regional leader in multiple fields, such as IT and motor vehicle production.
Q: How have you perceived (if so) this positive evolution in your business? Have you noticed any positive developments / trends? Or, on the contrary? Please, detail.
George Georgakopoulos: The banking system evolution follows the economic development of the country. The consumers and business environment confidence is gradually recovering and we can see this reflected not only in the increased levels of consumption and investments, but on the lending demand as well. Of course, there is still enough room to grow, especially on the corporate side. From our part, Bancpost is committed to have an active role in the expected growth of Romania and to support the key business sectors such as agri-food, IT, telecom, production and export. The companies operating in these industries generate added value and have a high potential for development. Bancpost has both the availability and the capacity to actively participate and support their development by covering various needs of financial banking products.
Q: Which were the main events and trends that have marked your industry and, in particular, your activity last year? How has the market changed? Which were the main drivers of your activity?
George Georgakopoulos: 2014 marked an extensive NPL`s restructuring exercise for the banking system. As a result, the Romanian debt sales market registered some landmark transactions, translated into a healthier banking system which started this year in a much better position, more liquid and well capitalized, with significant premises for growth.
Regarding Bancpost activity, the efforts to improve the quality of the portfolio and the bank’s reorganization process led to positive results in the first quarter of 2015, which brought us back on profit, while helping us to maintain a comfortable liquidity position and capital adequacy ratio above the average of the banking system. We expect a rise in the volume of new loans and we have budgeted it accordingly. However, the achievement of our targets is influenced also by the overall economic outlook and the appetite of the individuals and businesses to engage into new financings. Overall, I may say that we have already seen a slight increase, and we anticipate this trend to maintain in the following period. Our main objective is to concentrate on supporting our customers and ensuring a sustainable growth for the bank. Therefore, there are companies in Romania, from various industries, with very high potential on medium and long term – I would refer, for example, to exporters, as well as to agricultural or IT&C companies – and we want to contribute to their future development plans.
Q: Which are your expectations / plans for 2015? Which are the main opportunities and risks in your industry?
George Georgakopoulos: We started 2015 with a good financial standing, both in terms of balance sheet and profitability. Our strategy is to consolidate our systemic position in the local market and to actively support the expected growth of the country.
Q: How do you assess the current business climate (in every respect)? What has changed in the recent years? What are the main problems which you are facing?
George Georgakopoulos: I’m very optimistic about Romania’s evolution, a country with great potential, especially for new business opportunities. Romania is still an emerging market and has not yet completed its journey towards reaching maturity. Both companies and banks underwent a transformation period and those who managed to cope with difficulties of the past years are well prepared to develop their businesses in a more prudent and sounder way. In my opinion, in the following next four years, the economy will expand considerably and the banks will play an essential role in the process.