Statements by BT Group representatives at the ZF Bankers Summit 2024

At the ZF Bankers Summit, organized by Ziarul Financiar, on 17-19 June, Banca Transilvania was represented during the first day by Oana IlașDeputy General Manager Retail Banking, Cosmin Călin, Executive Director Large Corporate Clients and Aurel Bernat, Executive Director Financial Institutions and Investor Relations.

During the second day, Banca Transilvania Financial Group was represented by Ömer TetikCEO, BT, Gabriela NistorCEO, Salt Bank, Nevenca Doca, Senior Executive Director Human Resources and Sergiu Mircea, Executive Director Marketing, Communication and PR. Below are the most important statements made by our representatives, in order of appearance on the panel.

Day I

Statements Oana Ilaș, Deputy General Manager Retail Banking:

• Liquidity is very high in retail banking, but there are now also many options for placing resources - either between business lines or through diversification. It's a good time for banks, a very good opportunity to help educate customers financially about the investment alternatives they have - such as mutual funds, private pensions, equities - which are increasingly linked.
  
  
• In the case of a mortgage/mortgage loan, the experience of the last two years has shown that a reduction in interest rates makes a huge difference, especially for customers who have been caught up in this period of rising interest rates with variable interest rates and who have started to turn to refinancing. Indeed, the dynamic is much greater in the refinancing area at the moment and this is a reality that may remain for the foreseeable future. We have to be inventive and ensure this growth in the balance of what we do on the plus side and adapt to the refinancing side. It matters a lot because the impact in the rate the customer pays to the bank is quite significant if the customer finds a better alternative, but customers are looking at several aspects. If there is a difference between 5.5% and 5.7%, maybe it doesn't matter so much anymore, but it matters also the relationship with the financial institution, the ancillary products that come attached to the product or the overall relationship the customer has with the bank.
  
  
• At least in the first quarter of 2024, retail is doing well, better than last year. It's a segment that has a lot of potential. I see consolidation really needed in Romania in the retail area, but bringing a lot of potential. Through consolidation we can offer much more efficient applications, but the population also benefits from much easier access to everything from outside.

Statements Cosmin Călin, Executive Director Large Corporate Clients:

• In 2022-2023 we saw peak prices in both energy and agribusiness, and with harmonisation and better predictability towards the end of the period in both sectors, prices have moderated, inflation has moderated, companies' need for working capital has been much lower, and so in the first two quarters of this year we have seen a much lower take-up than in 2023.
  
  
• One positive thing is that a large number of infrastructure projects have started at an accelerated pace. There are strategic investments that Romania is making in energy. Hence, the investment potential in Q3 and Q4, and especially in 2025 is impressive. We are already working on many deals in this area and I can say that the outlook for Q4/2024 and 2025 on the corporate lending side looks much better, even if growth may not be double-digit.
  
  
• The retail sector is going quite aggressively, with all the major chains growing, plus new regional players entering the local market. The healthcare area is also doing very well, and unlike other years when most hospital developments were from the private sector, this year we are also seeing regional hospital developments.

Statements Aurel Bernat, Executive Director Financial Institutions and Investor Relations:

• Not to mention galloping inflation and extremely high interest rates. The economy is coping with the current level of interest rates. At European level, there is a need for a reduction in interest rates because there is low economic growth. We see the benchmark interest rate at 6.5% by the end of the year, with decreases in stages, nothing risky. We are in an equilibrium zone and from now on adjustments will be smoother. People are used to the current interest rate level.
  
  
• I see a lot of public investment in infrastructure, and if the public deficit goes into these big projects, it will be fine. Living standards are rising. As the population and companies manage to save, so will Romania. The cost of financing is not much higher than in the past, about 1% above 2013. It is in Romania's interest. And I think we are much more critical of ourselves than foreigners.
  
  
• The course has been very stable in recent years and I think it will continue. There are no causes of depreciation. Remittances are there, we have an inflow of foreign currency, in the region we see quiet rates and inflation. We see the exchange rate around 4.97-4.99.

You can watch the first day of the ZF Bankers Summit 2024 in full here.

Day II

Statements Ömer Tetik, CEO, Banca Transilvania

• The timetable for OTP integration depends very much on final approvals from the authorities. We hope to merge the OTP structures into BT within 9 months. We like what they have there, it is a good bank, we like the team, the network, the customers. And we hope we will have a quick integration. It won't be the last transaction for us. We're looking at new targets. In asset management, leasing, factoring. It is inefficient for us now to buy a bank with a market share below 1%, the costs are not justified when we already have a 23% share. Maybe we will have transactions with medium or large banks. We want to continue to be the main player.
  
  
• In the next 6-7 years we need to double our assets to maintain market share. Our assets represent about 10% of GDP, while in neighbouring countries the largest bank has about 15-20%. We don't want to reach 28%, but we have room for a few more percent growth without creating a competition problem.
  
  
• I think we will see more transactions between banks with small ratings, below 2%, which will create some targets for the larger banks. We are not the only active participant on acquisitions. And we might see transactions between the big groups as well, to switch some places. Romania is a growing country and in London, New York people are talking about Romania and it's good to be present here. I don't think the big banking players would want to leave here.

Statements Gabriela Nistor, CEO, Salt Bank

• Capital costs are different from a traditional bank. You have higher operating costs, and they increase in parallel with the growth of the bank. You have to be inventive, some things have to be thought of differently.
  
  
• We've been careful on support, to have people. You can use AI to give support to colleagues in the call centre who talk to customers. But I think people when they have a problem they want a human to listen to them, not a robot. You can digitise all sorts of flows, but when emotions are involved it's good to keep a human touch.
  
  
• There are different strategies, then you see the end result. It may take longer to convert to a classic bank. But all banks in Romania started this trend before the pandemic and then it just accelerated. We see digitisation globally as well, we see many banks that have made a digital arm. In a neobank, strategy and technology also matter. It's a puzzle. It's about the business model, what you want to build, the culture you have inside.

Statements Nevenca Doca, Senior Executive Director Human Resources, Banca Transilvania

• I see less market momentum. The market has cooled down, I would say. One of the reasons is the contraction of the banking system. The system is not growing, it is contracting. This means that positions are disappearing, positions are changing, positions are changing in the sense of increasing. It is not only the banking sector that is shrinking, there are other sectors. For employers it is good news, there is more availability. However, among the top-ranked banks things have not cooled down so much. There are still vacancies, competition for good people. Here things are positive.
  
  
• It makes sense to work in a bank because you acquire or develop skills that are very transferable to other fields, here I mean work ethic, professionalism, attention to performance, things that once you have learned you can take to other industries or to your own business if you want to become an entrepreneur.
  
  
• We looked for use cases where the use of AI makes sense and is effective. We used colleagues on the inside, a vendor, held a hackathlon, 4 were selected and are being implemented right now. We're not looking for technologies to replace humans.  

Statements Executive Director Marketing, Communication and PR, Banca Transilvania

• I think we are better educated than we were a decade ago, but the problem is far from solved. It is important that the first two largest banks in Romania have joined forces and are pulling together in this endeavour. Beyond the fact that we are or are not financially educated, people think very highly of their financial education. There is an absolutely staggering discrepancy between what we think or where we think we are and where we actually are. We don't see the problem and that's an even bigger problem because we don't feel the need for a solution. There are many things that need to be done.
  
  
• Our aim is to explain basic financial concepts to Romanians, with examples. To do this we will start with children, young people, where we feel we can make a difference. Otherwise, however, we are a private operator, we can do things with a consumption of resources. Therefore we want to take a digestible bite. We start with three segments of children to whom we explain some extremely simple things. We see an absolutely incredible appetite.
  
  
• It helps us a lot that we are a decentralised operator, meaning that BT units in the country are decentralised and have local autonomy and they are happy to put their shoulder to the wheel on this project. The children go to the Other Week, they enjoy that they can get to a bank, they are well received, the head of branch or the branch manager having a course booklet puts the information there, having this booklet they pass it on to the children and if we look at such a booklet we might have a pleasant surprise.  

You can watch the second day of the ZF Bankers Summit 2024 in full here.