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Outlook
In 2006, our activities will continue to focus on retail customers.
A sales expansion programme and the introduction of
new products, including combined banking/insurance products,
will provide fresh impetus. Preparing for the introduction
of the euro on 1 January 2007 will be a major challenge.
Romania –
HVB Bank Romania (incl. Banca Tiriac)
€ m 2005 2004
Total assets 2,588 1,065
Net income before taxes 46.4 24.0
ROE before taxes 35.3 % 56.0 %
Cost/income ratio 45 % 38 %
Employees (full-time equiv.) 1,577 300
Offices 80 12
The Romanian economy lost some
of its momentum as a consequence
of external shocks,
including the severe floodings,
in 2005. Strong
Bucures¸ti
growth in domestic
demand and the resulting
import pull put pressure on
the current account. The process of disinflation
continued in 2005, though at a somewhat slower pace
following significant adjustments to regulated prices and the
massive inflow of capital in the wake of a partial liberalisation
of capital transactions. The strict fiscal policy was maintained
despite the introduction of a flat tax as part of the “big bang”
tax reform. This was one of the reasons why the rating agency
Standard & Poor’s upgraded Romania’s country rating by one
notch from BB+ to BBB– in September 2005. The currency
conversion and the switch to inflation targeting in mid-2005
proceeded without any major difficulties. The growth momentum
of the Romanian banking market remained strong, with
growth in deposits outperforming the increase in credit
demand. Demand for personal loans rose again, with lending
volume almost doubling compared with the previous year.
2005 was again a very successful year for HVB Bank Romania.
We exceeded profit expectations while maintaining our high
standards of service and quality. All items of the income statement
showed impressive growth. With an ROE of 46.5 % and
a cost/income ratio of 35 %, HVB Bank Romania is the most
profitable bank in our network.
86 CEE Network of Bank Austria Creditanstalt in 2005
In a customer satisfaction study conducted among companies
whose sales exceed € 1 m, HVB Bank Romania emerged as the
“Most appreciated bank in 2005”.
Business structure and development
Retail customers
The sharper focus on retail banking is reflected in the growth
of private customer business, which far exceeded expectations.
The number of customers doubled, credit card business
and lending volume expanded strongly.
The introduction of quality assurance systems, the centralisation
of back-office activities for branches within specialised
service centres and the introduction of online and telephone
banking have paved the way for a future positive development
of private customer business.
About two years ago, our Private Banking unit started to
actively serve customers with at least € 100,000 to invest.
Assets under management now total some € 83 m.
Corporate customers
Corporate banking continues to account for about half of HVB
Bank Romania’s revenues. The total number of corporate customers
rose from 1,300 to 1,760. The lending volume totalled
€ 729 m, an increase of 39 %.
As Romania moves closer to the European Union, the liberalisation
of the Romanian financial market is accompanied by
greater volatility. HVB Bank Romania offers its corporate customers
derivative products enabling them to
www.hvb.ro
hedge against growing currency and interest-
www.bancatiriac.ro
rate risk. These risk management products
also provide customers with added flexibility and liquidity, and
they have no effect on the balance sheet.
Our strength and professional approach in corporate customer
business have won national and international recognition.
Bucharest Business Week referred to HVB Bank Romania as
“Best in Corporate Banking” and Euromoney awarded the
bank the title of “Best debt house in Romania”.