Erste Chief Treichl Renews Romania Vow as Bank Revamps BCR Board
January 27, 2012, 12:23 PM ESTBy Irina Savu and Andra Timu
Jan. 27 (Bloomberg) -- Erste Group Bank AG, the owner of Romania’s biggest lender, appointed new managers to make its most expensive unit grow again, and told President Traian Basescu not to worry it may pull out of his country.
The Austrian bank’s Chief Executive Officer Andreas Treichl met Basescu in Bucharest today as Erste said in a statement it named Tomas Spurny, 47, as CEO of Banca Comerciala Romana SA from April 1. The Vienna-based bank also announced a new chief financial officer and a new head of BCR’s retail business, the division that generates most revenue.
“Despite the continued adverse business environment, Romania retains its excellent growth potential and is one of the core markets that Erste Group focuses on,” Treichl said in the statement. The new team of “internationally experienced bankers” will “steer the bank to achieve growth,” he said.
The renewed avowal comes as regulators and policy makers are trying to shield economic growth in eastern Europe against contagion from the euro area’s deepening debt crisis. New capital and liquidity requirements for the western lenders controlling three-quarters of the region’s banking system threaten to curb credit needed to fund companies and households.
Erste and fellow Austrian lenders including Raiffeisen Bank International AG and Oesterreichische Volksbanken AG control about 39 percent of the Romanian market. They “should remember the profits they made in the country in the past years” because cutting credits in a crisis period would not be “fair play,” Basescu had said Nov. 24, after Austrian regulators tightened rules on banks’ eastern European business.
‘Magic Words’
Basescu welcomed Treichl’s commitment. “These are the magic words I’ve been expecting to hear from you,” he said after the meeting, according to Romanian news agency Mediafax. The president also met Raiffeisen’s Romanian CEO Steven van Groningen yesterday, who told him the new rules will have an insignificant impact on Romania, the presidency said in a statement.
Erste, the second-biggest lender in eastern Europe, has been struggling to cope with rising bad loans and low new credit demand as the sovereign-debt crisis delayed an economic recovery in the region. It bought BCR for 3.75 billion euros ($4.9 billion), or 5.8 times book value, in a deal that closed 2006. The Romanian unit’s profit fell 86 percent in the first nine months of 2011 because of delinquent loans.
The lender also appointed Bernd Mittermair, 44, to replace Helmuth Hintringer as BCR’s chief financial officer. Spurny, previously the head of Intesa Sanpaolo SpA’s Hungarian unit, replaces Dominic Bruynseels, who had been BCR’s CEO since 2008.
Martin Skopek, who is in charge of coordinating Erste’s retail business, will also become a board member in BCR and head the retail department of the Romanian lender, according to the statement. Erste also named Sergiu Manea, 39, and Christian Bruckner, as new board members.
The other management board members are Chief Risk Officer Frank-Michael Beitz and Wolfgang Schoiswohl, who is responsible for corporate banking.
--With assistance from Boris Groendahl in Vienna. Editor: Zoe Schneeweiss
To contact the reporters on this story: Irina Savu in Bucharest at isavu@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net
To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net
