Coming from Herwig Burgstaller, vicepresident of Volksbank Romania, the announcement according to which the bank ”will turn overdraft into its main product” can seem a little odd. Over the last two years, the Austrians have stood out due to their aggressive approach to the market of lending for individuals with real estate assets put up as collateral, and this product in fact saw the bank go from being a small player to the third largest bank in the Romanian banking system.

In 2008, the assets managed by the Austrians outgrew the market four times, amid an around 95% exposure to real estate. However, since the beginning of 2009, the bank has not granted any new mortgagebacked loan, according to Gerald Schreiner, executive president of the bank, given that clients are no longer rushing to banks, and that developers are no longer launching any new projects. This explains the change in strategy that Burgstaller is suggesting, but players in the entire banking system are in fact changing course as they go along after it became clear that the lending market is blocked (or merely it slowed down very abruptly, as bankers prefer to say).

Under the circumstances, it is obvious that the thousands of credit advisers hired in the past few years (around 20,000 out of the 72,000 employees in the banking system, according to estimates made by Paraschiv Constantin, president of the Banking and Insurance Trade Union Federation), have to sell other products, at least for the time being. Similarly, keeping the over 6,500 branches and agencies in the banking system (of which over 1,000 were opened last year) does not make sense if they do not fetch a profit, instead entailing only costs. Shutting down a branch is, however, not an easy decision to make, considering that the investments involved in its opening were by no means insignificant.

”There will not be large-scale closures,” says Santiago Pardo Jimenez, a partner with Deloitte’s auditing department, in a talk to BUSINESS Magazin, arguing that ”they still have good business to do here.” According to him, sales will concentrate more on simple, lower risk products (such as cards, current accounts, Internet banking services), combined with a sharp focus on efficiency.