EXCLUSIVE - Rafal Juszczak, CEO GETIN HOLDING:"Many foreigners want to leave the Romanian market"

ADINA ARDELEANU (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 17 februarie 2014

Rafal Juszczak, CEO of Getin Holding, ready to take on the Romanian banking market.

Rafal Juszczak, CEO of Getin Holding, ready to take on the Romanian banking market.

The banking sector in Romania offers opportunities, because Romania looks like a place which many foreigners want to leave, after the ones who came here before the crisis got "burned", says Rafal Juszczak, the president of Romanian International Bank and CEO of Getin Holding.

Polish group Getin Holding has completed the takeover of Romanian International Bank (RIB) in the beginning of December last year, by becoming the sole shareholder.

RIB was owned by American citizens Daniel Roberts and his former wife, Florina Roberts. The two of them each held 44.7% of the shares.

At the end of last year, RIB received from its new shareholder a capital injection of 22.76 million lei (5.09 million Euros) and a subordinated loan of 1.2 million Euros. A new board of directors has been appointed, led by Rafal Juszczak.

Mr. Juszczak and Stephen Orlesky, the new CEO of the RIB, granted us an interview, about the plans they had with the bank, in Romania, as well as about the banking sector.

Reporter: Why Romanian International Bank?

Rafal Juszczak: Why not?!

Reporter: Did you have other offers as well?

Rafal Juszczak: We still do. There is a rule at Getin Holding - we don't talk about opportunities, we only talk about what we have done. Of course, we are considering other banks. We get proposals every week.

Why RIB? We had been looking at Romania for several years now, but we weren't desperate to buy. In fact, we are not desperate to buy anything, we are just looking for opportunities that fit our group, our strategy.

Aside from Poland, Getin has operations in Ukraine, Belarus, Russia.

At RIB, we have been approached by the previous owners, with whom we had several rounds of negotiations. We were looking for a platform.

Reporter: Would you say that there are other opportunities for Getin in Romania?

Rafal Juszczak: Yes, but we do not want to discuss them. There are opportunities, because Romania looks like a place that many foreigners want to leave. I think that those that came before the crisis got "burned" a little and now they want to make their exit, which creates opportunities for others.

Rafal Juszczak: In 2005-2008, everybody wanted to enter the market, at any price. Now, everybody wants to exit the market, at any price.

the question which gets asked is whether you have a strategy, if you know what to do, when and how. This is our advantage. We know what we want to do. We want to be in Romania because it is the second largest country in Central and Eastern Europe (ECE).

Reporter: What are the plans concerning the bank?

Stephen Orlesky: The plans are to use it as a platform for growing in Romania. After Poland, Romania is the second market in the ECE, which has many opportunities. Not just in terms of the population, but also from a macroeconomic perspective. The country is exiting the recession. Even though people don't realize it, the evolution of the GDP shows the growth.

So, we want to use the bank as a platform for retail and later perhaps for small companies as well.

We want to be very innovative. I think that all the banks claim that they want to be innovative, but at RIB we are already trying to come up with new approaches for allowing the opening of accounts online, banking applications for smartphones and tablets, with an emphasis on the distribution of banking products through technologically advanced channels.

Reporter: Do you want to expand into the region?

Rafal Juszczak: We are not looking at other markets in the region because they are too small. One needs to consider the scale.

The Romanian market is fragmented - there are ten banks with a market share of 70%, so, regardless of what you do, you can make the difference. Comparing with Poland, the pricing and the current stage of development, there is plenty of room to stand out here and to serve your clients in other ways.

In Poland, up until 2008, everybody thought that there is no more room for new banks. Starting in 2008, we have had five startups. One of them was "Idea Bank" (part of Getin Holding) - created from scratch - which is dedicated to SMEs. It now has assets of 3 billion dollars. In fact, the market is not saturated.

Reporter: Do you have a target for the market share of RIB?

Rafal Juszczak: Yes and no. The priority is the return on equity. Of course, if we do not earn market share, we won't be able to get a certain level of income, but we are not a bank that is going to start an aggressive marketing, and resort to dumping pricing.

Reporter: Do you think that banking is still a good business, in these turbulent times, in Europe?

Stephen Orlesky: Of course. The economy needs the banking system. Without a healthy banking system, you can't have a healthy economy.

Reporter: But the banking sector isn't healthy.

Stephen Orlesky: Well, it needs to get healthier for the economy to grow.

Reporter: How can it get healthier?

Stephen Orlesky: I think it is already doing better. The major banks are getting rid of their non-performing loans, they are selling them to special purpose vehicles, we are beginning to see consolidation among the smaller banks. I think that this process will continue. In other words, through portfolio cleanup and consolidation. Once this process gets completed, we will proceed further.

Reporter: What do you think the effect of the European "bail-in" measure will be (the rescuing banks using the depositors' money)?

Rafal Juszczak: It's not our case. Getin Noble Bank, in its darkest times, 2008-2009, had provisioned a loan portfolio of 1 billion Euros. Month after month, the bank was profitable. We received no aid from anybody. So the measure isn't affecting us.

Reporter: You have increased the share capital of RIB by 5 million Euros. Do you think that will be enough?

Rafal Juszczak: There will be another step. We will increase the share capital again this quarter, to fit within the requirements of the National Bank of Romania.

Reporter: Are you considering rebranding the bank?

Stephen Orlesky: Yes. Since we have recently arrived here, the process will take place as follows: we want to clean up the portfolio and then we will rebrand ourselves, while also relocating to a new headquarters, to give the bank a breath of fresh air. We are expecting that to happen sometime near the end of Q3 - early Q4.

Rafal Juszczak: For us as a group, it is important to emphasize that we would want to have a Romanian bank over here, rather than a Polish one. It will be a Romanian bank, with Polish know-how. Of course, we are aware of the fact that we don't know everything. We don't want to repeat the mistakes made by the foreign investors when they came to Poland, who claimed to be all-knowing. We don't want to ignore reality. You will see that very quickly, because the board will be made up exclusively of Romanians. It is important to have people who have worked on this market.

Reporter: Who will be part of the board?

Stephen Orlesky: Ana Cernat will start on Monday (ed. note: today). She is coming from Bancpost and has a consistent experience in the field. Another person will begin on March 3rd and I would not like to disclose her name yet.

Reporter: Can you compare the banking system in Romania with the on in Poland?

Stephen Orlesky: I think that here, the quality of assets is far lower. The rate of non-performing loans is approximately 20%, whereas in Poland it is about 8%

Rafal Juszczak: Aside from the quality of assets, in Poland, foreigners own 65% of the sector. I think that Poland is significantly more innovative and very modern. the penetration of the internet in the banking system is far lower in Romania. In Romania it is over 50%. That means that half of the people using the internet have access to their accounts online. In Romania, the percentage is just 3%. It is incredible! Out of 100 people, only 3 use internet banking.

Aside from the obvious differences, I would also add that when it comes to the expertise of clients, Poland is very competitive. And all the banks are very profitable. Over here, almost no one is, due to the quality of assets. That will change, because Romania is feeling well from an economic point of view.

Reporter: Was it difficult in bringing your business in Romania?

Rafal Juszczak: It was very easy. It was the quickest approval I've ever seen in my life - one month from the signing to the final permits. We have received a lot of help from the NBR. Of course, we also carried out our promises.

Reporter: Are you considering a listing of the bank on the stock market?

Rafal Juszczak: It is too early to tell.

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