Romania Business News, 11.

2009

INFLATION RATE
 Ţinta 2011: 3,0%
 Ţinta 2010: 3.5%
 Ţinta 2009: 3.5% (interval de variaţie: +/- 1pp)
 Valoarea actuală: 4,94% (sep.2009 / sep.2008)

NBR INTEREST RATES

 Rata dobânzii la facilitatea de depozit: 4%
 Rata dobânzii de politică monetară: 8%
 Rata dobânzii la facilitatea de creditare: 12%

Exchange Rates

Leu (RON) 2 noi.2009 3 noi.2009 4 noi.2009 5 noi.2009 6 noi.2009

AUD 2,6370 2,6248 2,6433 2,6281 2,6440

Dolarul australian

BGN 2,2010 2,1995 2,1988 2,1984 2,1980

Leva bulgărească

CAD 2,6968 2,7128 2,7467 2,7201 2,7147

Dolarul canadian

CHF 2,8521 2,8449 2,8458 2,8457 2,8435

Francul elveţian

CZK 0,1627 0,1627 0,1650 0,1650 0,1672

Coroana cehă

DKK 0,5784 0,5780 0,5779 0,5778 0,5776

Coroana daneză

EGP 0,5323 0,5368 0,5326 0,5296 0,5278

Lira egipteană

EUR 4,3047 4,3017 4,3005 4,2995 4,2988

Euro

GBP 4,7756 4,7916 4,8163 4,7820 4,7919

Lira sterlină

HUF 1,5657 1,5403 1,5533 1,5523 1,5647

100 Forinţi maghiari

JPY 3,2341 3,2597 3,2051 3,2085 3,1865

100 Yeni japonezi

MDL 0,2613 0,2631 0,2632 0,2632 0,2632

Leul moldovenesc

NOK 0,5111 0,5029 0,5095 0,5079 0,5104

Coroana norvegiană

PLN 1,0129 0,9980 1,0077 1,0061 1,0116

Zlotul polonez

RUB 0,0999 0,1001 0,0995 0,0993 0,0997

Rubla rusească

SEK 0,4138 0,4091 0,4130 0,4103 0,4141

Coroana suedeză

TRY 1,9434 1,9410 1,9459 1,9398 1,9473

Lira turcească

USD 2,9152 2,9376 2,9130 2,8961 2,8862

Dolarul american
 ZAR 0,3700 0,3700 0,3762 0,3784 0,3817
Randul sud-african

BRL 1,6530 1,6637 1,6694 1,6823 1,6827

Realul brazilian

CNY 0,4269 0,4302 0,4267 0,4242 0,4227

Renminbi-ul chinezesc

INR 0,0621 0,0621 0,0620 0,0616 0,0617

Rupia indiană

KRW 0,2458 0,2479 0,2472 0,2454 0,2476

100 Woni sud-coreeni

MXN 0,2202 0,2205 0,2200 0,2179 0,2174

Peso-ul mexican

NZD 2,0989 2,0899 2,1117 2,0836 2,0920

Dolarul neo-zeelandez

RSD 0,0459 0,0456 0,0455 0,0457 0,0458

Dinarul sârbesc

UAH 0,3572 0,3567 0,3529 0,3543 0,3537

Hryvna ucraineană

AED 0,7936 0,7997 0,7931 0,7885 0,7857

Dirhamul Emiratelor Arabe

XAU 98,5755 99,7983 102,2558 101,2771 101,5905

Gramul de aur

XDR 4,6243 4,6315 4,6455 4,6284 4,6078

DST

Market Indices

  BET 4,474.64 -27.60 -0.61%

  BET-C 2,608.76 -17.09 -0.65%
  BET-FI 20,032.27 -1,031.48 -4.90%
  ROTX 9,443.90 -48.91 -0.52%
  BET-XT 423.59 -7.31 -1.70%
  BET-NG 578.63 -4.75 -0.81%
Values as of: 11/6/2009

Market Capitalization

Exchange segment: BSE

- 76,595,707,420  LEI
- 17,817,927,659  EUR
- 26,538,600,035  USD

Exchange segment: RASDAQ

- 12,753,704,895 LEI
- 2,966,805,828 EUR
- 4,418,856,938 USD

Exchange Total
BSE Statistics Last Update  11/6/2009 4:30:18 PM

  Trades Volume Value (LEI) Value (EUR)

Shares 5,350 48,499,087 29,719,268.59 6,913,387.13
Bonds 3 957 33,522.54 7,798.12
Rights 0 0 0.00 0.00
Fund Units 8 246 10,424.20 2,424.91
Futures 2 30 130,972.50 30,467.22
Total 5,363 48,500,320 29,894,187.83 6,954,077.38
  Trades Volume Value (LEI) Value (EUR)
Shares 4,865 40,878,916 28,718,064.74 6,680,484.03
Bonds 3 957 33,522.54 7,798.12
Rights 0 0 0.00 0.00
Fund Units 8 246 10,424.20 2,424.91
Futures 2 30 130,972.50 30,467.22
Total 4,878 40,880,149 28,892,983.98 6,721,174.28

RASDAQ Statistics Last Update  11/6/2009 4:30:18 PM

  Trades Volume Value (LEI) Value (EUR)

Shares 485 7,620,171 1,001,203.85 232,903.10
Bonds 0 0 0.00 0.00
Rights 0 0 0.00 0.00
Fund Units 0 0 0.00 0.00
Futures 0 0 0.00 0.00
Total 485 7,620,171 1,001,203.85 232,903.10

ERDB, EIB and WB to invest over 24 billion Euros in Central and Eastern
Europe
The European Reconstruction and Development Bank (ERDB), the European Investments Bank
(EIB) and the World Bank (WB) decided to invest some 24.5 billion Euros in the Central and
Eastern Europe zone, an ERDB press release informs.
The plan will be applied between 2009 and 2010. "We believe firmly that with the significant and
coordinated support by (international financial institutions), bank groups, governments across
Europe and European institutions, financial sectors in Central, Eastern and Southeastern Europe will
pass the test of the global financial crisis and emerge from it healthier and stronger," the release
reads.

Romania Business News

05.11.2009
Companies and people alike will stand to suffer and unemployment will rise even further as a result
of NBR's decision to halt the reduction of the key rate, because this way loans will no longer get
cheaper, and the final impact will be a slowdown of the economy over the span of several quarters,
ING Bank Romania says
At the same time, a banker that spoke under condition of anonymity says he is "very confused" by
"NBR's disproportionately restrictive" policy for an economy in recession
"One year from the onset of the crisis you keep an additional cost (via minimum mandatory
reserves i.e.) of 1.5%. The problem is that we would stimulate domestic demand? We are afraid of a
0.5% added to inflation and we are not looking at unemployment? I am very confused." He believes
that with this approach, the NBR is only driving clients to loans in foreign currency, which remain
much cheaper.
"This decision will lead to a rise in interests on the interbank market, especially of the long-term
rates, which were taking into account a relaxation of the monetary policy - which means interests on
loans for clients will no longer go down and that will slow down the economy for several quarters if
high interests remain in place. Therefore, companies and people alike will stand to suffer, and
unemployment will increase more than anticipated," says Nicolaie Alexandru-Chidesciuc, ING
Bank's chief economist. He explains that the NBR maintains a restrictive monetary policy, although
Romania is experiencing a much more profound decline compared with other countries in the
region which have a flexible exchange rate system in place.
Radu Ghetea, CEC Bank and Romanian Banking Association chairman says that interests on
deposits in RON should remain in the one-digit bracket, so as to avoid making loans more
expensive.
"I still believe that interest on deposits needs to stay one-digit if we are to actually achieve
something. This will be our policy. There can also be immediate reactions. A year ago some banks
were quick to react and drove the interest to 28% a year. Some banks will be very quick to react -
the treasury banks, which are not interested in lending but in making profit," Ghetea says. NBR's is
still the highest interest in the region, with the real interest rate of the market standing at 6-7%.

Cheapest new studios and apartments finished in Bucharest

05.11.2009
Several years ago, when apartments under construction now were just scale models, developers and
consultants said prices would rise as the delivery date drew near. However, the crisis came with
finished apartments at lower prices, BUSINESS Magazin says.
Finished studios at 40,000 euros and apartments fit even for the "First Home" programme that set a
loan cap of 60,000 euros. Two years ago, such prices seemed almost impossible, especially in
complexes with several hundreds of housing units generally including facilities such as retail space.
The only options were homes at the outskirts of the city, which is valid now, too, but current offers
include finished homes, or homes that will be finalised this year.
"It's very difficult to find such offers in semi-central areas or that are not at the outskirts of
Bucharest. Land acquisition costs were higher when projects were started, construction costs were
higher and the developers of projects in better areas are not yet willing to cut prices, either,"
comments Valentin Ilie, CEO of Coldwell Banker Affiliates of Romania, a real estate company
brokering the biggest portfolio of both new and old apartments.
The cheapest studio and two-room apartment offers are indeed for housing projects located in the
outskirts such as Prelungirea Ghencea, the exit to Autostrada Soarelui or Titan. The cheapest studio
for instance is in Rasarit de Soare project developed by Conarg in Titan district. The studio has a 47
square metre built area and a price of 40,900 euros, followed in BUSINESS Magazin's ranking by a
studio in Confort City project at a price of 41,475 euros. The situation is similar in the case of two-
room apartments.
Can a two-room apartment be built in a better area and sold for 60,000 euros? Valentin Ilie makes
some calculations. "Yes, this is possible, but works should start now, when construction costs are
lower and one stands the chance of finding a plot of land at the price of a distressed asset".

Misu Negritoiu, ING Romania's CEO: We will continue to grow organically

18.09.2009
The Dutch at ING, the first foreign bank to have entered the local market fifteen years ago, will
finally start making profit from all their lines of business in 2010, after having embarked upon a
process of transformation into a universal bank three years ago. "In rethinking the group as a
European institution, Romania is an important market. We will continue to grow organically, and
all divisions will start making profit next year," stated Misu Negritoiu, ING Romania's CEO. In
2006, ING started a project to reposition itself as a universal player, after having created an image
of financial boutique with exclusive and expensive products, targeted for multinationals, major
state-run companies and wealthy people.
The plan includes retail expansion to one million clients, served by a network of about 250 offices.
Albert Roggemans, head of the retail division says that this year the bank will go beyond the
900,000-client milestone and have a 200-strong office network, and the operations that started five
years ago will finally begin contributing to the bank's profit. Over the last few years, ING has
expanded its offer with products aimed at medium-sized companies and even small firms.

Negritoiu, ING Romania's CEO: The economy recovering in Q4 is mere

statistical speculation
16.09.2009
Unless it adopts the euro, Romania has no solutions for the problems of an economy that already
operates with the European currency, while we are arguing over a RON-denominated interest,
which now only has an impact on a marginal market, says Misu Negritoiu, general manager of ING
Bank.
"Hungary can afford the luxury of not thinking about the euro, because it has markets that operate
in forints, Poland has markets that use zlotys, but we don't have markets that work with RON. I
think it is feasible for us to make the most important corrections in 2010-2012 because we primarily
need economy's basic balances to be re-established, not actual convergence, which we will never
achieve.

Unemployment hurting industrialised areas and Romanian companies

03.08.2009
More than 1,800 employees of companies in Prahova county will be made redundant in the third
quarter of this year, with constructions, transports and the food industry as the main fields that are
targeted, in line with County Employment Agency data quoted by Mediafax. Prahova is one of the
most industrialised areas in the country, with large companies such as Petrom, Lukoil, Unilever and
Coca-Cola, as well as many Romanian manufacturing firms located there. A similar number of
layoffs have been announced in recent days in food and fashion retail, other fields hurt by the
worsening economic conditions.
Thus, Romanian networks PIC and Leonardo have given up almost 2,000 employees in a bid to
make up for declining consumption. "Many have rushed to generate very high sales volumes to
accumulate turnover and make profit and this is why they have thrown themselves upon the first
mall they set their eyes on," Maria Grapini, manager of textile producer Pasmatex, which closed
down two of its stores of Baia Mare and Timisoara, said about local fashion retailers. Domestic
networks or those operated by Romanian companies have been the first to take tougher measures.

Diosi, OTP: Rise in unemployment is a time bomb for banks

28.07.2009
Small and medium-sized enterprises are the worst hit by the arrearage, because they have no
reserves to help them through this difficult time. Personnel redundancies are creating another
problem for banks, because people lose their incomes and as such are rendered unable to repay their
loans.
The number of overdue retail loans has stabilised since the beginning of the year, but the autumn
could bring a new surge, as a result of the increase in the number of people who will lose their jobs,
says Laszlo Diosi, chief executive of OTP Bank.
"Individual clients have adjusted to the harsher conditions, we do not see a worse situation than at
the beginning of the year. It is a time bomb, though. There will be many people in trouble this
autumn and a vicious circle will be created," Diosi says.
The share of loans rated as "doubtful" and "loss" (loans overdue by at least 60 days) in the total
portfolio exceeded 11% in May across the entire system, compared with 6.5% in December last
year, according to the NBR data.
OTP’s boss says that he budgeted a higher risk cost for the second half (calculated as a ratio of the
provisions set up and the total volume of loans i.e.) than in the first half.
Under the circumstances, Diosi says the state should come up with a programme to help people
rendered unable to repay their loans to the bank, as it did with the programme to drive sales of new
credits. The Hungarian government has recently secured approval from the European Commission
for such a programme.
Diosi also sees a "slow but constant" deterioration of the loan portfolio of the small and medium-
sized enterprises, which are experiencing arrearage, given that the state reimburses VAT late and
many companies are also late in paying their suppliers.
"It’s not a disaster, but it is a constant worsening. We, however, hired people specialised in debt
collection and bailiffs to take care of these loans." OTP is actually in the process of subjecting a
number of assets pledged as collateral to compulsory execution to collect its debt from SMEs.
On the other hand, Diosi is more relaxed when it comes to the loans granted to large companies,
who have more options of cutting costs to survive the difficult period.

High interest rates are unable to stimulate economy

27.03.2009
The individual clients' appetite for saving is increasingly weak, with the annualised rise of deposits
slowing down significantly over the last year, despite the high interest rates offered by banks. At the
end of February, the population's RON deposits were up 17% in real terms (eliminating the effect of
inflation) on February of last year, according to data from the NBR (National Bank of Romania). In
comparison, the annual growth rate amounted to almost 31% then, and came in the wake of rates of
as much as 45% reached in the summer of 2007.
At the end of February, the population's RON deposits had reached 56 billion RON (equivalent to
13 billion euros). For deposits in foreign currency, the slowdown was even more significant. The
annualised growth rate (calculated in euros) fell to 7.7% in February, down from 43% in February
2008. The overall volume reached almost 7.8 billion euros in February. Analysts say now clients
have less and less money to set aside. "I expect a major slowdown in the annual growth rates for the
population's deposits, despite the interests offered by the banks, which can be considered attractive.
The slowdown will be triggered by a wage decline in real terms, which, coupled with a rise in
unemployment, will lead to a decline in the population's saving capacity," says Nicolaie Alexandru-
Chidesciuc, senior economist of ING Bank.

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