The Romanian subsidiary of Turkish group Garanti Bank expects a 15 percent growth for its loan portfolio this year and will continue to expand its network of banking units in the country, according to the bank’s management.

“We expect 15 percent growth, both in loans and in deposits. Growth will come from new business but also from refinancing existing clients,” said Ufuk Tandogan, CEO Garanti Group Romania. He added that Garanti’s priority is to have organic growth and that it isn’t looking to buy loan portfolios from other banks.

“Our purpose is to increase market share, as size is important in the banking sector, but we want sustainable growth,” Tandogan mentioned.

Garanti Bank was the 12th largest bank in Romania at the end of last year, with a market share of 2 percent.

Last year, Garanti Bank’s overall loan volume increased by 5.4 percent compared to 2012, reaching EUR 1.09 billion. The small and medium enterprises (SME) segment was the main driver, registering a 17 percent growth, but retail holds the largest share in the bank’s loan portfolio. Its deposits increased by 42 percent last year.

During the first quarter of this year, Garanti Bank’s loan portfolio already had a 4.5 percent increase, to EUR 1.14 million.

The bank plans to increase its network to 85 agencies, this year, from 78 agencies at the end of 2013.

Garanti Bank finalized a five-year bond issue worth EUR 68 million in May, which secures funding for the bank’s future projects but also help diversifying its finance sources by providing medium term funding. The bonds were issued in local currency (RON) and were listed on the Bucharest Stock Exchange (BVB) on Wednesday, June 25. BRD managed the bond placement which was subscribed by 24 institutional investors, mostly local.

Besides Garanti Bank, the Turkish group’s operations in Romania also include Garanti Consumer Finance, the brand under which Ralfi IFN SA operates, Garanti Leasing, the brand under which Motoractive IFN SA operates and Garanti Mortgage, the brand under which Domenia Credit IFN SA operates.

In March 2014, Garanti Bank and Garanti Mortgage announced that they have started formal procedures to merge their two companies in Romania, which should be finalized by the end of this year.

The group’s assets at the end of March 2014 were EUR 1.96 billion and its consolidated net profit was EUR 10.6 million, out of which EUR 9.2 million is the net profit of Garanti Bank.

Andrei Chirileasa, andrei@romania-insider.com

(photo copyright: Romania-insider.com)