Governor of the National Bank
Executive president of Alpha Bank
In the wake of its accession to the European
Union on January 1, 2007, Romania has become
one of the most attractive markets for foreign
investors in the SEE and CEE regions. Joining
the union has underscored the countrys
economic stability and engineered increased
development across several sectors. Romania
has been cited as a top investment destination
owing to its favorable corporate tax rates,
low labor costs and heightened productivity.
Romanias economy registered a 6.6 percent
increase in 2006, with a similar figure anticipated
in 2007. Meanwhile, more money is expected to
flow into key areas such as agriculture, infrastructure
and the environment, owing to the countrys
access to European structural funds.
Central Bank Governor Mugur Isarescu,
one of the key players behind Romanias
economic success, notes that: One of the
challenges will be to maintain high growth rates
without creating too large an imbalance, such
as the current account deficit or inflation.
Addressing the issue of the deficit, Minister
of Economy and Commerce Varujan Vosganian explains:
The deficit can be managed if we continue
to attract foreign direct investment, and if
that FDI can cover around 60-80 percent of it.
FDI in 2006 was €8 billion ($10.8 billion).
If we can keep the level of FDI at €6-8
billion the current account deficit should be
sustainable in the long run.
Regarding inflation, Mr. Isarescu points out,
By the end of 2007, not only inflation,
but also inflation expectations, will have decreased.
Year-on-year inflation has almost halved to
less than 4 percent at present from 8.6 percent
One of the main engines of economic growth
has been the Romanian banking system. The first
foreign bank to open in Romania after the 1989
revolution was Alpha Bank of Greece. The bank
has been at the forefront of the local markets
development since then, being one of the first
to offer mortgages as well as other innovative
products. The bank is now focusing on further
expansion throughout the country. We have
set ourselves the goal of becoming one of the
top five banks in Romania with a market share
of 10 percent by 2010, explains Executive
President of Alpha Bank, Sergiu Oprescu.
Alpha Banks current share is about 4.5
percent. Under its expansion plan, the bank
is angling to increase its branch presence from
83 at present to 300 by the end of 2010, Mr.
Headquartered in Athens, Alpha Bank had initially
set up its Romanian subsidiary as a corporate
bank, tracking the big businesses that entered
the market in the 1990s. In 2001, it stepped
into the retail market and now its portfolio
is relatively balanced at 40 percent retail
and 60 percent corporate.
In the future, owing to the development
of the banking market, we want to focus on the
retail front, rather than corporate. Corporate
has its limitations, while retail has quite
a long way to go, Mr. Oprescu says.
Alpha Bank is also focused on niche segments,
such as credit lines for small and medium-sized
enterprises and municipalities seeking to finance
badly needed infrastructure works.
Mr. Oprescu believes that owing to Romanias
E.U. accession, many multinationals are looking
to set up their regional headquarters here,
citing Romanias potential role as a major
hub for the international IT&C market, notably
in software development.
For companies expanding in the region, he
asserts that there are really only two choices
for a regional headquarters: Bucharest and Sofia,
Bulgaria. Being that Romania is a much
larger country and has a much larger potential
consumer market, multinationals are left with
only one option: Romania, Mr. Oprescu