ECONOMY

National’s Banca Romaneasca set to expand quickly in 2007

National Bank, Greece’s largest, plans to almost double the branches of its Romanian subsidiary for the second year in a row. The failure to acquire CEC, Romania’s top bank, was a big disappointment to National’s management, which sees the Romanian and Turkish markets as the cornerstone for the bank’s quest to become the top regional bank. The Romanian government canceled the bidding, claiming that National’s offer, as the sole bidder, was unsatisfactory. National has come to realize that an acquisition of CEC is unlikely to happen and, with no more desirable acquisition targets to pursue in Romania, is now focusing on the growth of its subsidiary, Banca Romaneasca. In 2006, Banca Romaneasca’s branches increased from just over 40 to 80. This year, they will increase to about 150, bank sources said. Even during the heat of the battle for CEC, in the third quarter of 2006, Banca Romaneasca inaugurated 25 new branches, a clear sign of National’s policy of quick expansion in the Romanian market. After all, Romania is the second-largest country among the 10 Eastern European countries that have joined the European Union since May 2004. At the end of September 2006, Banca Romaneasca’s loan portfolio had expanded to -662 million, a gain of 72 percent from the same period in 2005. Pretax profit reached -10.9 million, up from -3.5 million in September 2005. National Bank’s expansion strategy in Romania will be unveiled in its new business plan, to be presented on February 22. In Turkey, National’s offer for the outstanding shares of Finansbank is still under way. The offer will close on January 29. Already 4.3 million shares have been acquired from minority shareholders, raising National’s stake to 80.40 percent. Finansbank is one of the most profitable retail banks in Turkey and its absorption into National Bank will give a big boost to the group’s results.