Société Générale, owner of local lender BRD, is to target higher profits in Romania, said the French bank's CEO and Chairman Frédéric Oudéa in an interview with the Financial Times. Romania and Russia are the lynchpins of Société Générale's international business, but are currently considered to be “under performing.”

By the end of 2013, Oudéa said he wants to “show that our international retail is delivering growth and more profitability than today and that it’s an advantage versus more exposure to the eurozone,” quoted by the Financial Times. He explained that the banking group faces different challenges in Russia and Romania. Competing with large local banks is the main difficulty in Russia, whereas in Romania the problem is the cost of risk provision for bad loans.

According to the Financial Times, the international division has not pulled its weight recently. Despite accounting for 20 percent of the group's total assets, the international business only contributed 13 – 14 percent of profits in the last two years. In the first half of 2012, the group's international division recorded losses of EUR 186 million, according to the Financial Times.

Read the Financial Time article.

Liam Lever, liam@romania-insider.com