No. 96, November 8th, 2007

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Romanian Insurance Market Awards

Can this be done without compulsoriness?

The draft of the law concerning the mandatory dwellings insurance against natural catastrophes - now being on the Romanian Parliament agenda for the debates - raises great polemical issues among public opinion. Let's not forget the disputes waken up at every year's end by the already "famous" MTPL policies. As it is the case of Pillar II private pensions, the word "compulsory" seems to displease many Romanian.

In a EU member state each and every one should have the option of choosing the best for oneself, for one's family but for the state to apply any constraint...Maybe the state should only to pay for the damages...
This is, in fact, the Romanians conception...Whatever happens, the State will pay, rebuild houses or increase pensions...

Coming back to households insurance, statistical data show that only 8% of the total number of houses is insured which result in a number of 640,000 houses protected by a facultative insurance.
Yet how much of an optional is this facultative insurance? Is this much more of a myth, isn't it?

Although there is no information in this regard the fast-growing mortgage credit market had a positive impact towards property insurance. Thus, it is well known that banks requests their clients who borrow money for buying a house to have insurance. How many of those unconstrained by this condition would ask for this product? Isn't it another form of compulsoriness even if it is indirect?

Another "wise" opinions claim the pointlessness of paying that EUR 20 insurance premium for a flat in an apartment house in Banat, unexposed to those three risks (floods, earthquakes and landslides). Is EUR 20 too much money? Not necessarily, taking into consideration that claims paid by the State in the case of a natural catastrophe consist in our money as well. The EUR 1.5 billion damages from 2005 floods divided to the 5 million contributors would mean EUR 300 sum per contributor. If we also take into account MUNICH Re prospects, damages born from a major earthquake similar to the one in 1977 would rise up at EUR 20 billion that means EUR 4,000 per contributor.

Therefore, could it be done without compulsoriness? It would be rather difficult in a country where word "prevention" can't be found in the dictionary...According to some estimations made by Media XPRIMM, Romania should reach a 90% penetration rate for household insurance, catching up the European states, in about 50 years...Until then, let's try the compulsoriness...

by mihaela.circu@mxp.ro

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BCR Asigurari de Viata


OMNIASIG Asigurari de Viata

Interview with Mrs. Denisa DUMITRU,

XPRIMM: How will evolve the reinsurance price in 2008?
International reinsurers have enjoyed positive results recently. This enables them to be more competitive and there may be some more favorable pricing for reinsureds in the coming year as a result. However, this will depend on reinsurers' experience with specific individual reinsureds.

XPRIMM: How do you perceive the Reinsurance offer's evolution, especially on the natural catastrophe segment?
D. D.:
The small amount of new capital that has entered the market recently will probably be offset by recent mergers between some medium sized reinsurers. When two reinsurers merge the resulting capacity is usually less. Consequently the prospect is for overall capacity for natural catastrophe coverage to remain stable. This could change if capacity is withdrawn or new capacity is introduced between now and year end.

XPRIMM: Do you consider that the introduction of the compulsory insurance for homeowners will result in a growth of Reinsurers' interest in our country?
D. D.:
The introduction of obligatory homeowners insurance will result in a higher concentration of natural perils risks which will need to be diversified by means of transfer to the international reinsurance market. The international market is fully capable of accommodating this increased demand for additional reinsurance capacity. However, much will depend on the design of the enabling legislation and how effectively it is implemented.

XPRIMM: Do you consider necessary the introduction of a deductible in case of compulsory insurance for homeowners?
D. D.:
When insurance is made mandatory, then affordability becomes a key issue. Coverage that reimburses every small claim is unlikely to meet the affordability threshold that such a program requires. Some sort of deductible is necessary if the coverage is to be affordable for everyone. The problem is finding a balance between affordability (high deductible) and adequate coverage (low deductible). The best solution would be to offer a variety of deductible/price combinations for the insurance buyer to choose from.

XPRIMM: According with the opinions of some analysts in Monte Carlo, the insurance industry is on an ascendant trend, because of the introduction of new risks management methods. How do you comment this?
D. D.:
The science of Risk Management is becoming more sophisticated and many businesses now practice ERM (Enterprise Risk Management). ERM seeks to manage not only the hazard risk by means of insurance but also the generally uninsurable business (strategic, financial and operational) risks. The management of business risks does not directly impact the insurance mechanism. Indirectly however, the greater focus on and understanding of the overall issue of ERM, usually at more senior levels of management, probably results in better and more effective use of the insurance mechanism.

XPRIMM: Thank you!

by mihaela.circu@mxp.ro

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Mrs. Denisa DUMITRU,


Compulsory dwelling insurance - now or never
In Romania, out of over 8.4 million dwellings only 8% are insured through a facultative contract according to data presented by Angela TONCESCU, President, during the seminar "Insurance Supervisory Commission - reliable factor in the implementation of the new regulation in the field: compulsory dwelling insurance.
Also, INSOMAR's survey made at the supervisory authority's request reveals that 12.8% of the subjects said that have a facultative dwelling insurance, while 60.2% sustain the introduction of compulsory dwelling insurances.
"All these statistic data emphasize that although the Romanians majority wants the introduction of this law, they aren't aware of the risks, not having an education background in this direction", Angela TONCESCU stated.
Moreover, it's important to emphasize that there is a polarization of dwelling and household insurance demand at urban level, the number of insured dwellings from rural not exceeding 100,000", Florina ALMAJANU, General Director of National Association of Insurance and Reinsurance Companies from Romania mentioned.
"Also the normative act is the first step in the population's education as concern the protection through insurance because Romanians don't have an insurance and goods protection knowledge yet", the President of Supervisory Commission declared.
"The Insurance Supervisory Commission relies on the support of the insurance companies that will form the Insurance Pool against Disasters because insurance signing and paid claims are the insurers' attributions. In the same time, we rely on the support of World Bank which together with the Ministry of Economy and Finance will finance the reinsurance program, absolutely compulsory in case of catastrophic risks. As supervisory authority and regulator we consider in the best interest to support this bill and other legislative initiatives meant to encourage insurances and prevention and loss potential decrease", Angela TONCESCU concluded.
"We hope once agreed the necessity of this law the specialists' voice will be listen to the backbone in order to create the regulations frame, mechanisms that have real chances of functioning", Florentina ALMAJANU emphasized.
"Media XPRIMM has been supporting this bill since its proposal phase. We believe it is very useful because it may be a "springboard" for facultative insurances", Sergiu COSTACHE, General Director of Media XPRIMM declared.
by mihaela.circu@mxp.ro, 2.11.2007

No compulsory policy for those with facultative dwelling insurance
Those who have a facultative dwelling insurance against flooding, earthquake and landfall don't have to buy a compulsory dwelling policy. "We have decided to withdraw from the bill the provisions that obliged the dwellings' owners who signed facultative insurance contracts to buy a compulsory dwelling insurance within 5 days from the contract's expired date", Ioan Aron POPA, President of Committee of Budget, Finance and Banks in the Romania Senate, has stated.
But those who are in this situation must notify to the financial administration in whose area the insured dwelling is about the existence of a facultative insurance, according to the law's conditions and standards.
This modification meant to encourage owners to sign facultative dwelling policies.
In Romania, only 8% out of 8.4 million dwellings are insured through facultative contracts. The penetration degree is very low if we consider as example counties like Hungary (65%) or Austria (90%).
The specialists believe that the introduction of compulsory insurance will determine the increase of facultative insurances' sales because the sales network involved in this process will take advantage of the sale of these policies to convince people about the necessity of a facultative insurance.
by mihaela.circu@mxp.ro, 7.11.2007

RON 1.5 million net assets under management of ALLIANZ-TIRIAC Pensii Private
The volume of net assets under the management of the two facultative pension funds of ALLIANZ - TIRIAC Pensii Private, AZT Moderato and AZT Vivace, totalizes RON 1.57 million, about RON 1.25 representing the contribution of AZT Moderato.
"Comparing to the last week's results, the changes are not spectacular, because, as it's known, at present the main increase source is the contributions' collection and not the financial benefit. Thus, the most important changes of the net assets under management value happen at the beginning of the month since almost all companies pay the wages within this period ", Dorin BOBOC, Investment Director, has stated.
One can estimate that at mid November the volume of net assets under management of ALLIANZ-TIRIAC Fond de Pensii will reach around RON 1.85 million considering the increased number of participants and the significant volume of cash announced for the beginning of month.
AZT Moderato is the first facultative private pension fund whose net assets under management has exceeded RON 1 million. On 19th of October, AZT Moderato had 46.4% market share according to the Supervisory Commission of Private Pension System. At the same date, AZT Vivace, facultative private pension fund with high risk degree, had 10% market share and the most important growth of net assets under management.
by daniela.ghetu@mxp.ro, 1.11.2007

BCR Asigurari - in 9 months like others in one year
In the first 9 months of the current year, BCR Asigurari underwrote RON 454 million (EUR approximate 135 million) gross premiums, up with 52.86% compared to the similar period of 2006.
The registered growth was proportional. Thus, motor insurances (MTPL and Hull insurances) have 57.47%, credits and warranties insurances have 30.49%, while property insurances represent 9.37% in the total of gross premiums for the first 3 trimesters of 2007.
In comparison to the analyzed interval of 2006, goods and damages to property insurances had a significant increase, approximate 40%, accidents insurances doubled, facultative motor insurances, goods in transit insurances grew 48%, while aircraft insurances, general liability insurances and montage and construction insurance - "all risks" and the constructors' liability enhanced too.
On motor insurance segment, motor hull grew 42% and MTPL tripled, reaching RON 110 million after the first 9 months of 2007.
BCR Asigurari has around 700,000 clients, 87% being represented by natural persons.
"On a market dominated by motor insurances, the positive evolution of property insurances or general liability insurances represents a sign from the clients, whose insurance needs and Products' knowledge degree grew. In this context, BCR Asigurari will continue to offer flexible protection products, which to meet the clients' needs and wishes, but also consultancy in choosing the most efficient insurance program", Mihail TECAU, General Director of BCR Asigurari has stated.
BCR Asigurari operates exclusively on the general insurance market, focusing on the distribution network's development as to facilitate the clients' access to the complete range of services and products.
by mihaela.circu@mxp.ro, 1.11.2007

BCR Life aims the unit-linked market
In the first 9 months, BCR Life registered a volume of RON 60.52 million, exceeding with 89.13% the similar period's results of last year.
The assets value of the company reaches RON 141.3 million, up with 41% than the similar interval of 2006.
The gross profit totalized in the same period was RON 3.7 million.
All business lines registered an increase of the gross premiums. Moreover, the saving products for the retirement had also an accentuated dynamic.
"The results obtained by now are the consequence of the company's marketing and sale strategy. The development of the distribution network, of the sale network, the services' quality, the flexibility and the promptness in the public relations has allowed us to fulfill the objectives and to develop quickly on a market with a high competitive degree as life insurance market. The key of our success is the attitude towards the clients, the capacity of offering new solutions customized and efficient, adapted to their needs", Florina VIZINTEANU, General Manager and President of the Directorate of BCR Life has stated.
In short time, BCR Life will launch unit linked insurances, complex products which combine the characteristics of life insurances with those of investments products, respectively the protection offered by life insurances with the benefits of investments.
At the end of September, the company had 92 employees and 800 insurance councilors, operating within 43 agents and covering the territory of Romania.
At the moment, the company has a large range of products including life insurances, health insurances, savings plans for children, saving plans for retirement and facultative pension funds.
by mihaela.circu@mxp.ro, 6.11.2007

170,000 Romanians waits their pension under the "Lion's wings" of GENERALI
170,000 Romanians has already opted for the private pension fund of GENERALI Fond de Pensii. Thus, comparing to the volume of adhesion validated on 1st of November, GENERALI has almost 9%, being closed to its established target of 10% - 12% of the private pension market.
"ARIPI" pension fund, administrated by GENERALI is the only fund with a high financial risk which means higher expectations regarding the financial efficiency.
"Our risk profile, unique until now on the market, was an attraction factor for a part of persons that has adhered to the fund administrated by us. However, this is far from being the main factor. One should notice that the participant's portfolio is equilibrated from the age point of view, which means that our product was interested for vary peoples, with different needs and perspectives", Ioan VREME, General Director of GENERALI Fond de Pensii has declared.
Comparing to other operators, GENERALI has chosen to distribute the products through its own sales network. "If we can say that we respect the adhesion plan, it's due to our sale network who had a severe discipline and succeeded very good performances", Ioan VREME has highlighted.
by daniela.ghetu@mxp.ro, 7.11.2007

Over 100,000 adhesions for FINCOP
FINCOP Broker has succeeded in collecting over 100,000 adhesions to private pension funds, the most adhesion being to ALLIANZ-TIRIAC Fond de Pensii and INTERAMERICAN Fond de Pensii", Mihai SEITAN, General Manager of the broker has stated.
At present, FINCOP Broker de Pensii Private has intermediary contracts with 5 most powerful administrators authorized for Pillar II: ALLIANZ-TIRIAC, AVIVA, BT Aegon, GENERALI and INTERAMERICAN. After the validation from 15th of October, these totalized around 400,000 participants, meaning that in average the contribution of FINCOP to the participants' portfolio of the administrators is 25%.
"It's true that at present, there is a group of 5 - 6 administrators which have over 90% of the expressed adhesions. Personally, I think it would have been better to have a larger number. However, the remained period to the end of adhesion process can still make surprises. I am convinced that at least several administrators, which hasn't succeeded by now to have a significant presence on the market, are capable of growing their market share. Moreover, there are at least 2 pension funds, AG2R and MKB Romexterra, which has declared their intention of collaborating with trade - unions and which can make important surprises as concern adhesions.
by daniela.ghetu@mxp.ro, 1.11.2007

GENERALI underwrote RON 281 million in 9 months
Within January - September 2007, GENERALI underwrote RON 281 million, with 34% more than the similar period of last year, when gross premiums reached RON 210 million.
The value of gross premiums on life segment was RON 42.4 million, rising 57% comparing to the first 9 months of 2006 (Ron 26.9 million).
On non - life business line gross premiums totalized RON 238.5 million, approximate 30% more than the analyzed period of previous year (RON 183.9 million).
The best sold insurances were motor insurances, dwelling and household insurances, followed by individual life insurances.
Motor insurances registered the most important growth (46%), from RON 118 million to RON 172 million.
Also, goods and property insurances had a significant enhance of 20%, from RON 38.9 million to RON 46.7 million, sustained by the dwelling insurances which had a 150% enhance in the portfolio, from RON 6.3 million to RON 15.8 million.
"One must notice that GENERALI registered growths for all insurances classes and obtained profit in the mentioned above period. These results were influenced by the controlled increase of the portfolio, the improvement of loss ratio, especially on motor segment, by introducing a new tariff system according to the characteristics of the vehicle and its driver", Tudor MOLDOVAN, General Director GENERALI, has declared.
At present, GENERALI has a share capital of RON 120 million, the most recent increase of it happened on September. "Our main objectives of the company remain the launch of new insurance products, new partnerships with the banks and the expand of the territory network according to the strategic development direction of the GENERALI Group at world and regional level", Tudor MOLDOVAN has added.
by mihaela.circu@mxp.ro, 6.11.2007

Over 68% increased for OMNIASIG
In the first three quarters of the current year, OMNIASIG underwrote RON 617.73 million gross premiums, more with 68.34% than the similar interval of previous year.
During the same period, the insurer grew its gross profit with 20% than the first 3 trimesters of 2006, to RON 18.4 million, due to the underwritings increase and to a more careful evaluation of the risks.
Between January and September 2007, terrestrial transport insurance other than rail insurances had the most significant growth of 116.34%, gross written premiums reaching RON 270 million.
Other important evolutions registered credit and warranties insurances (92.35%), financial loss insurances (59.8%) and MTPL. On MTPL segment, gross written premiums totalized RON 185.06 million, up with 56.09% than the first 9 months of 2006.
As concern paid claims, they were RON 244 million.
For the end of 2007 the representatives of insurer estimate RON 730 million gross written premiums and an improvement of loss ratio on MTPL segment.
by andreea.ionete@mxp.ro, 29.10.2007

In 10 years, EUR 1.5 billion for health insurances
By 2017 the health insurance market will reach EUR 1.49 billion gross written premiums according to a survey made by Roland BERGER.
This evolution is conditioned by the evolution of the public health system's reform.
The demand on this segment is obvious. Thus, over 67% subjects, regardless the age, sex and education believe useful such insurance reveals the survey made by INSOMAR at the request of Insurance Supervisory Commission.
In 2006, the private health insurance sector registered a real growth of 68.22%, to RON 46.2 million, representing the most spectacular dynamic at the whole Romanian insurance market. However, in the total of written premiums of 2006, health insurance market represents 0.81% (0.19 % more than in 2005).
In the first trimester of the current year, health insurance class obtained RON 11.33 million, rising 20.13% compared to similar interval of 2006.
At the moment, health insurances are the only deductible insurances in the EUR/year 200 limits.
by mihaela.circu@mxp.ro, 29.10.2007

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MTPL in Russia - EUR 1.5 billion in nine months
According to the preliminary results announced by the Russian Motor Insurance Association, in the first nine months of the year, the insurance companies from Russia had subscribed EUR 1.47 billion gross written premiums for MTPL insurance policies. Also, the total amount of paid claims for MTPL was about EUR 780 million.
Compared to the same period of 2006, the amount of premiums raised up by 15.7% and the amount of paid claims by 24.5%.
In the first three quarters, the Russian insurers had contracted over 25 million motor insurance policies, with at least 2 million more compared to the previous year.
The first 20 companies which lead the MTPL chart cumulate almost 75% (EUR 1.11 billion) of the market share in terms of gross written premiums. Top 3 MTPL is represented by ROSGOSSTRAKH (27%), RESO-Garantia (8.4%) and ROSNO (4,9%).
by irina.galasanu@mxp.ro, 6.11.2007

ZURICH had paid USD 260 million for NASTA's shares
ZURICH Financial Services (ZFS) had paid USD 260 million for the majority share stock of the Russian insurance company NASTA.
The transaction was made earlier this year, at the beginning of April and was finalized by the undertaking of 66% of the Russian insurer by ZFS, with the possibility to increase the participation at 100% until 2010. The transaction's value was announced now, after the ZFS report for H1/2007 was published.
The price for the rest of NASTA's shares (34%) will be appraised within further negotiations.
With more then 140 million clients, Russia represents, on a long term basis, the biggest European insurance market, intended for individuals.
The insurance company NASTA was funded in 1993. In 2006, the insurer had subscribed a total amount of premiums of USD 230 million, increasing during the last five years. NASTA has a territorial scheme of 67 agencies and 300 work points.
by irina.galasanu@mxp.ro, 1.11.2007

GENERALI undertakes two Russian insurance companies
The Russian Federal Antimonopoly Service (FAS) announced that the acquisition offers issued by the Italian insurance group GENERALI regarding the undertaking of two Russian companies - CZECH Insurance Company and FINANCIAL Service - by December 12 this year, would be analyzed.
FAS decided to prolong the initial evaluating terms in order to investigate and analyze all the peculiarities of the future transaction.
"All the interested persons can deliver to the antimonopoly service information regarding the influence of this transaction or other actions upon the competition on the market", shows the press release remitted by FAS.
CZECH Insurance Company, a subsidiary of one of the biggest insurance companies in Europe, CESKA Pojistovna (part of PPF Group) operates in Russia since 2002. It is among the first ten Russian Companies on life insurance sector.
We remind that in July 2005, FINANCIAL Service Company (Russia) ceded to CESKA Pojistovna about 51% of CZECH Insurance Company shares. As a result, the Czech insurer increased its equity within CZECH Insurance from 49% to 100%.
by oleg.doronceanu@mxp.ro, 1.11.2007

Bulgaria has to increase the tariffs for MTPL
The actuary profession has been more than important these days. The reason is no other but the fact that by November 15th the actuaries working for six insurance companies from Bulgaria have to prove that the MTPL prices the companies have introduced correspond to the eventual average in case of a road accident. The Financial Supervisory Commission (FSC) sent notification letters to the respective insurance companies. "FSC initiated measures of compulsion requiring corrections until November 9th and introduction of the new prices until November 15th", said Ralitsa AGAIN, FSC Deputy Chairperson, head of Insurance Supervision for INSURANCE.BG.
She did not want to say which the companies were, but she declared that some generate great premiums amounts and some do not. The actuaries will be sanctioned for the negative technical results, since they have determined the prices of the insurance products. The actuaries will be actually fined. The official said that the purpose of the fines is to make the actuaries understand that they are not calculators; they bear responsibility and can change the prices of the products. She also said that actuaries will be fined for allowing negative results not only of MTPL sales, but for other insurance products too.
Ralitsa AGAIN announced that some companies have taken the recommendation of the Commission into consideration, but the deadline will show which companies will actually introduce corrections.
FSC reports for the first seven months show that MTPL insurance and Motor Hull insurance generated 64.36% of the premiums in the field of non-life insurance. Compensation payments made in the field of motor insurance made 86.85% of all compensation payments.
Almost all insurers state that MTPL prices are really low. The policies in 2007 are being sold at almost the same prices as in 2006. After the accession to EU, however, the insurance covers for road accidents on the territory of the Union. The insurers do not change the prices due to the high competition, they say. Some companies are even dumping on the market which can damage the image of all insurers.
The premiums amount should be adequate to the portfolio development, as well as to the number of compensation payments made and the claims, i.e. all insurers should be able to cover for the eventual damage.
by Insurance.bg, 29.10.2007

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Club ARO

NBM Reinsurance

Romania - the most attractive M&A market
Senior managers in Central and Eastern Europe (CEE) have identified Romania as having the greatest potential for mergers and acquisitions (M&A) in the region, followed by Bulgaria. They expect Romania and Bulgaria to reach the highest level in terms of mergers and acquisitions and of activity of private equity funds.
These managers share their strategic views and expansion plans on M&A. They expect an alert pace of acquisitions in the region in the coming 12 months.
Such as the conclusions of a report on Central & Eastern European Corporate Strategy made by KBC Securities, the integrated European Equity House of KBC Group, together with CMS and PENTA Investments. The report included the views of 100 managers in, the Czech Republic, and on the M&A climate in their countries, according to Budapest Business Journal.
More then half of managers interviewed indicated that is the most attractive market from their point of view, and that financial services are expected to be the most active sector in the coming year. Most senior company executives are targeting opportunities offered by western companies for their acquisitions.
by standard.ro, 8.11.2007

Over EUR 200 million in private equity transactions
The value of private equity transactions could exceed EUR 200 million in 2007, following two large deals which are in advanced stages of negotiations, according to South Eastern Europe's Private Equity Association (SEEPEA).
SEEPEA is also lobbying for pension funds to be allowed to invest in private equity funds. Two large private equity agreements, worth over EUR 100 million, are to be signed by year-end, and as such this market will double in volume in 2007 year-on-year.
"Investments of private equity funds in Romania will probably exceed EUR 200 million. As far as I know, at least two large transactions will be finalized by year-end", according to a statement yesterday by Robert LUKE, President of SEEPEA.
The value of private equity transactions amounted to EUR 110 million in 2006, 6.6 percent of the total value for Central and Eastern Europe, compared to the EUR 70 million invested in 2005, according to SEEPEA data.
Major companies administering private equity funds in Romania are ADVENT, AIG, Enterprise Investors, GED Capital, ORESA, RAEF, NCH, and the European Bank for Reconstruction and Development (EBRD).
Large transactions on the Romanian market include the EUR 55 million takeover of the ARTIMA supermarket chain and that of sweet maker KANDIA Excelent (nearly EUR 100).
by standard.ro, 8.11.2007

BVB's collaboration with Wiener BORSE is worth EUR 250 million
Institutional investors brought more than EUR 250 million on the Bucharest Stock Exchange (BVB), as a result of collaboration between Wiener BORSE (the Vienna Stock Exchange) and BVB.
"When we launched the ROTX index, we expected an increase in BVB's liquidity, due to new international investors coming onto this stock exchange", BVB's General Manager, Stere FARMACHE said. Vienna Stock Exchange officials said that these investors bought shares in companies included in the ROTX index, which is used by several international banks as active support for structured financial instruments.
The ROTX index was launched in March 2005, and follows the evolution of the 11 most important companies listed on BVB. The market value of these companies amounted to EUR 17.88 billion, up 86 percent in the past two years from EUR 13.88 billion, and accounting for 70 percent of BVB's capitalization.
"Our cooperation with BVB is the most advanced of all collaborations Wiener Borse has with Central and Eastern Europe stock exchanges; we have a great institutional relationship", Michael BUHL, Wiener Borse's General Manager, said.
The Vienna Stock Exchange currently has collaboration agreements with 15 international stock exchanges. "We are convinced that we can continue our cooperation with BVB, and together be prepared to face any possible changes due to regional competition and stock exchange globalization", Michael BUHL added.
by standard.ro, 7.11.2007

RAIFFEISEN Bank estimates profits of EUR 59 million
RAIFFEISEN Bank Romania, the local subsidiary of Austrian-based lender RAIFFEISEN, with assets totaling EUR 4.936 billion at the end of July, estimates net profits worth EUR 59 million for 2007, 10 percent higher year-on-year.
The bank targets EUR 300 million in income and EUR 241 million in expenses, according to a decision by shareholders published in the Official Gazette. RAIFFEISEN Bank has a broad expansion strategy and has allocated some EUR 24 million to open 220 new offices in 2008.
"We aim to open a branch for each working day, in 2008. We also target to increase our share from a current 8.9 percent", the bank's President, Steven van GRONINGEN, recently told a press conference. According to market sources, expenses for opening a new unit amount to an average EUR 110,000, if the space is rented.
RAIFFEISEN Romania had some 337 units and 5,145 employees by mid-2007, according to a report by the Austrian lender. RAIFFEISEN Romania had large deposits at the central bank in the first half of 2007, which lead to an increase in loans to other banks granted by RAIFFEISEN International, the Austrian group's external business division. The group operates on the Romanian market through RAIFFEISEN Bank Romania, housing bank RAIFFEISEN, RAIFFEISEN Leasing, brokerage company RAIFFEISEN Capital&Investment, private pension company RAIFFEISEN Asset Management and RAIFFEISEN Investment Romania.
by standard.ro, 7.11.2007

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XPRIMM Newsletters


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Coordinator: Alexandru D. CIUNCAN

Editor in Chief: Mihaela CIRCU
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