“Romania is still an emerging market and banks are selling basic products. The lack of sophisticated products shows a high growth potential for the Romanian banking system. There is high potential for savings products, asset management, and investment products,” Gelin said.
Furthermore, although local bankers foresee a slowing of economic growth and a high key rate, currently at 10.25 percent, they are betting on the potential of the local economy. “The economy will no longer increase by an annual 8 percent, as is now the case, but a 6 percent level is still significant growth. I am not expecting a drop in the key rate before the end of 2009, when inflation could reach 6 percent,” Gelin added.
Profits in the local banking system are expected to exceed €1 billion this year. However, the profit growth rate is likely to temper next year, due to harsher lending rules passed by Romania’s National Bank (BNR).
Gelin indicated that BRD is also due to register a lower profit increase next year, although the bank is not expected to be affected by the international crisis.
