Banker gets new lease of life

After four years at the helm of Erste Group Immorent, Bogdan Cernescu notched up substantial financial results in the years before the crisis hit, but has also had to find ways to fight the economic downturn and keep the company afloat By Roxana Cristea

October 2011 - From the Print Edition

He told The Diplomat-Bucharest that the recession had taught developers to think long term, and that he believes speculative investments will no longer find a place in Romania.
I graduated from the Faculty of Finance and Banking during the 1998 crisis and I did not have many opportunities,” said Bogdan Cernescu, general manager of Erste Group Immorent Romania, looking back to the time when he was searching for a job.
He wanted to work in a livelier field than banking and, at that time, leasing was a new scene, one that quickly caught on in emerging markets, where the banking sector was underdeveloped and banks unwilling to lend.
“That is an area where you can grow, plus I could learn a lot of new things. And then I made the choice. I read in a newspaper that three investment funds had acquired a majority stake in Motor Active and I sent an email. I was accepted and so I came to work in the leasing field.”
After two years of leasing, Cernescu served as commercial director at BRD Sogelease and tried to develop his own business. Four years ago he took on the Immorent general manager position.
The company, owned by Austrian group Erste, entered the local market in 2004 with its leasing division, Immorent Romania IFN. It subsequently developed and today is active in domains like project development, construction and leasing services.
“When the group comes into a country, it brings all three lines. But they have a different life cycle. We start with leasing. And, as the business begins to take shape, we move into riskier areas such as project development,” said Cernescu.

Immorent lesson

Unlike his previous experience, the position at Erste Group Immorent meant more than just management for Cernescu.
“We know how to finance, how to build, and how to evaluate, develop, and sell properties,” he said, summing up his duties at the company. The Erste Group Immorent chief added that the pivotal moments in his career were when he had to change activity.
“Deciding to leave the banking system and work as independent consultant was very interesting. I think it was the most difficult period of my career,” he commented.
His ethos is that when you try your luck alone you learn a lot about yourself. “And you wake up in the morning and have to give all you can and do your best because you depend on the success of that business,” says the entrepreneur.
There came a time when he had to decide whether to hire people or remain independent. In the end he opted to return to the banking system, where he experienced both highs and lows.

Good times, bad times

“The best time at Immorent was when the sales volume increased. 2008, for instance, was a very good year in terms of business. This year was a good year too because we have begun to reap what we’ve sowed in the last two years,” said Cernescu. During this period the company has managed to keep its number of employees, and did not have to make redundancies. “I can say we have had a constant evolution,” said Cernescu.
According to him, since the second half of 2008 the company has stayed on an even keel even though business was much lower than before.
“I think we made about EUR 25 million per year. The crisis has further strengthened us. We used to seek only to increase our portfolio, and we have had to adapt and learn other things like how to manage clients and accept that certain areas will have losses,” added the businessman. While 2009 was a difficult year with many shocks and much bad news, in 2010 things were a little more settled.

New focus

The crisis also brought many changes for the firm, which has given up on development and not purchased land. But the interest in new acquisitions has increased this year.
“We wanted to make a deal early this year but, in the meantime, the owners changed their mind,” said Cernescu.
The firm also plans to focus on new segments, such as the residential sector.
“We are doing homework related to the residential sector. We are making a projection of what is happening now and what might happen in the next five to ten years in this area. In addition, we are looking to see to what extent further industrial development makes sense,” concluded the head of Immorent.

Future plans

This year the company hopes to stay at the same level as last year. Although there was little activity in 2009 and in 2010, this year things are beginning to happen on the real estate market. First of all, land prices are lower.
“It’s worth buying land and starting to develop it in one form or another. And that’s good news. Moreover there is activity in the market,” said Cernescu.
In his opinion, Romania needs new office buildings and industrial space. “It is important that developers have a long-term vision. Speculative investments will no longer find a place in Romania. This is the concept on which Erste Group Immorent is based. We do not want overnight gains,” added the Immorent chief. “In the future I want to do something that is related to real estate.”

Who is Bogdan Cernescu?

A graduate of the Academy of Economic Sciences in Bucharest, he has significant experience in banking and financial services with a core focus on sales, asset-based finance, corporate finance and real estate. In January he was appointed co-head of the Romanian arm of Erste Group Immorent, after taking over the managing director position at Immorent in Romania in mid 2007. Prior to that he held various position at banks and leasing companies, the most recent one (2005-2007) being Commercial Director of BRD Sogelease.