Vol. 4 No.1  

Getting personal

As Romanians sell up their self-made business and cash in on the real estate sector, private banking departments hope to clean up. Michael Bird and Alexandra Pehlivan examine the growing trade in personal services
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Romanians flush with a few hundred thousand Euro in cash have begun to emerge, as they make a quick buck from the real estate boom, sell out their business or land a top job at a local branch of a multinational.
This class of the new rich, mostly men in their forties and fifties, have made their money using hard work or through luck – rather than manipulating the network of connections that helped trigger the first wave of rich in the 1990s.
These guys know the real estate boom will not offer 100 per cent returns every year from now until 2014 and that investments in new enterprises begin to pose a higher risk, as competition across all sectors heats up.
They need instruments which offer security on the best terms possible and deposits which give a solid return.
Therefore all the leading banks in Romania are lining up to attract the cash-rich to their private banking departments. So popular is the trend that there are even plans to set up a private bank from billionaire extremist presidential candidate and financier of Steaua football club Gigi Becali.
In private banking, dedicated counsellors offer clients advice and products dependent on the risk appetite and the time periods clients wish to make deposits. Some banks offer asset management, including investment portfolios.
In western Europe private banking tends to serve wealthy octogenarian widows wondering which errant relative will receive their fading inheritance.
But in Romania the market targets entrepreneurs and managers rising to the top of local branches in blue chip companies.
“We are seeing a trend of businesspeople exiting businesses,” says Alex Dumitrescu, head of private banking, BCR Erste. “More people have started to sell their land or business.”

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