Millennium Bank Romania, the domestic branch of Portugal's biggest bank, Millennium BCP, is getting ready to launch its operations in September 2007, when it is set to directly enter the market with a 40-branch network, according to the strategy approved by the parent bank.
Millennium BCP ran in the race for BCR's privatisation in 2005, being beaten in terms of the offered price in the final phase by Austria's Erste Bank. Millennium did not abandon its plans of entering the Romanian market, though, and after considering several alternative acquisitions it decided on an investment from scratch.
The initial phase of the project will involve 40 million-euro investments, which include the setting up of a 40-strong branch network with the entire necessary IT infrastructure.
By 2011, when the bank is estimated to get into the black, the Portuguese are going to invest another 200-250 million euros in the Romanian branch, given that the territorial network should increase to 100 branches.
According to the business plan, Millennium Bank Romania will end 2007 with net losses of some 30 million euros, and will start making profit in the fifth year of presence on the market. The bank was granted the establishment licence by the NBR on December 22nd 2006 and is now in the phase prior to getting an operating licence. The domestic branch of the Portuguese bank tends to position itself as a universal bank on the market, but in terms of clients it will focus on companies and on the segment of medium-income individuals, with both categories expected to see rapid growth. At the same time, Millennium is targeting the consumer lending market, where it will operate through a specialised channel.
To build the new bank, the Portuguese decided to rely on domestic bankers who are best acquainted with the market, but who also need to grow familiar with Millennium BCP's business model and products.
The management team is almost complete, with interviews having been already organised for branches outside Bucharest. The head of the bank will be Portuguese, though: Jose Toscano, the former general manager of the M&A unit of Millennium BCP and the one who led the team that was in charge with the bank's participation in BCR's privatisation.
The bank is betting on a sudden arrival onto the market, with 40 branches due to become operational from the very first day, and this is why it is not rushing to launch its operations fearing some incidents that may harm its image from the beginning. The Portuguese primarily rely on the high quality of offered products and services to attract customers. Romania is the third market on which Millennium BCP is getting ready to enter, after Greece and Poland. At the end of last year, the bank's assets amounted to 79.25bn euros, 3.1% higher year-on-year.
Millennium BCP
Ran in the race for BCR's privatisation in 2005
Is set to invest 40 million euros in 2007, in the first phase
Plans to spend another 200-250m euros by 2011, when it expects to start making profit
Will set up a network of 40 branches this year
The territorial network will expand to 100 branches in 2011
Will have companies and medium-income individuals as clients
Also targets the consumer finance segment
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