Money talks

From political player to banking boss, Misu Negritoiu, the director of wholesale banking at ING Romania, talks to Michael Bird about both sides of the local power scene

     Former deputy prime minister Misu Negritoiu gives what some may consider a strange reason for leaving Romanian politics.
     “I wanted to make some money,” he said. “It was too poor to stay in politics, so I stepped out.”
That was 1997 and, though he has some nostalgia for the political arena, he is unsure whether he could return.
     “I like too much what I’m doing,” he says, “but we’ll see.”
     From a closed shop 20 years ago, the current political class has gone to the other extreme and now seems to suffer from over-exposure.
     “The most dangerous drug for politicians is their visibility and their dialogue with the media,” Negritoiu says. “I know people who will die if they are not asked a question by a journalist, are not part of the news or a camera does not flash on them - but this is not only in Romania.”
     Ministers often seem more interested in appearing for two hours on a late-night chat-show than spending time reading through policy proposals. “Too much talk and too little work,” says the banker.

MISU NEGRITOIU Head of wholesale banking, ING Romania Before 1989 Worked in a divi-sion within the Ministry of Foreign Trade and as a civil servant. 1990 Head of Romanian Econo-mic Mission in New York 1991-1992 Secretary of State in Economic Assistance 1992-1994 Deputy Prime Minister and Minister of State 1994-1996 Chief Economic Advisor to President Ion Iliescu 1997 Joined ING Bank Romania Hobbies: History, particularly of Romania, art, history of religion, golf, gardening

     The class also has many figures who seem to serve only one interest – remaining in power. “People are staying in politics for longer than is expected, was expected or is necessary,” argues Negritoiu. “They don’t give up or step aside. This drives their actions, instead of benefiting the country and people.”
Many who stay, says Negritoiu, do not want to upset the status quo and therefore do not make many policy changes.
     “They should fulfil one or two mandates, do the right thing and then leave.”
     In other central European countries, with the exception of the Czech Republic, he says the politicians who made the post-revolutionary reforms have completed their role and quietly left the political stage. “Romania is the
only country where the politicians have resisted for so long,” he says.
     Romania was unprepared when the revolution emerged.
     “We inherited more rigidity,” Negritoiu says. “We had a lack of knowledge and education of the market economy. It was a completely closed country at the revolution and it took us by surprise.”
     Meanwhile Hungary, Czech Republic and Poland had a class of technocrats. One of the last Romanians to study abroad in the 20 years before the revolution was Petre Roman, who was to become prime minister. “He took technical studies, which were not helpful in the transformation process,” says the banker.
     Some had read a few books on free market economics, but this lack of expertise came to light as other central European nations progressed with speed.

SURVIVAL STRATEGY

     Principles have been absent in Romania. Even leaders such as the Democratic Party (PD) can switch its allegiance from centre left to centre right without much of a public debate. “There are very few people with real values and convictions that they are fighting for in politics,” says Negritoiu. “The country is poor and politicians mix up politics with economic interests – they want to stay in political life because they need to survive. They think if they leave politics, they do not know how to do anything else. They see politics as a business rather than fighting for values.”
     He adds: “A lot of people claim they are social democrats because they are there [in the party] and it helps them to serve some personal interests or it is trendy to be a politician and an MP. The same is true on the right.”
     “They don’t have time to discuss doctrines – either they fight on a daily basis and that doesn’t matter because they don’t refer to the doctrines. Some are friendlier to business and more open, some are more leftist and against private property – maybe the only one left with convictions is Ion Iliescu.”
     But he is no defender of the extracurricular activities of some politicians – their financial hinterland. “It’s hard to believe that when you see [a politician has] 20 pages of personal assets – including paintings and bank accounts, that this person has any values left.”
     Although he believes the Social Democratic Party (PSD) will remain in Parliament, Negritoiu says it needs to reshape its doctrine with a new core team and a credible voice if it wants to win elections.
     “They don’t have anything to sell,” he says. When in Government in the midnineties, Negritoiu’s job was to promote the benefits of foreign investments to a country suspicious of selling out to the west. But many of his fellow politicians were afraid the voters would not swallow the idea.
     “I said: you have to go to them and explain – that there is no danger at all if foreigners come and have access to the land. They will not move the land, but turn it into more value added for the economy and create jobs. People were embodied with the same consciousness [as before the revolution].”
     There are few Romanian-run business which can cope with a European single market, says the banker.
     “The most efficient and innovative sectors are there due to foreign investment, like banking and steel, so by default Romania’s future will be shaped by foreign investors,” he says. “Romanians can’t manage on a
big scale – you accept it and create an environment for foreign investment to operate… otherwise the economy will be vulnerable. The country has all the ingredients to encourage inward investments.
     This is the only chance for the country to take off – otherwise it might
be marginalised.”

GOING LARGE

     As the ING corporate guru, Negritoiu says his bank would “love” to finance large projects in energy and infrastructure.
     Currently the bank is involved in financial services, advising and privatisations, mergers and acquisitions and financing and growth development. The bank is looking forward to opportunities in Government projects, including prefinancing and co-financing with the EU.
     “Our portion will be for financing projects worth 100 million Euro or more,” he says. Motorways offer very attractive prospects for financing or advising. Not the Transylvanian Highway, contracted to Bechtel, but possibly the European Corridor between Bucharest, Deva and Arad.      This project, if set out to a fair tender, could attract up to 75 per cent from the European Investment Bank, funds the Transylvanian Highway cannot access. ING could lend money to the Government or to developers in this project.
     In energy ING is involved in advising in the sale of the crown jewel of power distribution, Electrica Muntenia Sud, which includes Bucharest in its jurisdiction.
     The bank is willing to finance energy projects, such as the rehabilitation of power plants. Romania has three hubs of energy creation – thermopower, hydropower and nuclearpower.
     Funding the construction from scratch or rehabilitation of the existing thermopower plants could be in the region to 80 to 450 million Euro, while deals for Nuclear power plants are worth more than one billion Euro.
     In Romania, hydropower plants have a series of small stations and a huge one – Iron Gates on the Serbian border, which the state may consider for privatisation.
     The Government is also debating a new hydropower plant on the Danube, which could either be a joint venture or hired out to a private operator.

SELF-MADE

      Starting out as a corporate bank driven by the size of its next deal, ING Romania has since undertaken a large expansion strategy in retail, using its automated ‘Self-Bank’ concept in almost 100 nationwide units, but this is “not enough,” says Negritoiu.
     The optimum size of a network in Romania could be around 400 branches - close to BRD - Groupe Societe Generale’s figure. ING may expand to 200 or 300 branches. This means in three years time ING could then become a “full-fledged universal bank in Romania,” says the boss.
     To encourage the entrepreneurial spirit among its employees, ING Bank Romania has ‘franchised’ its almost 100 branches to self-employed sales staff.
     But with separate ‘Self-Bank’ machines for cash and non-cash transactions in the branch’s main lobby, customers rarely speak to the on-site sales agent, unless they want a special request or something goes wrong.
     “Most of our clients talk to machines,” says Negritiou. “They are friendly machines. You cannot call them ATMs, they are more like robots. In nice orange colours.”
     Its customers are those amicable to new tech. “Those walking their dogs, who pay their bills in the evening,” he adds. “Particularly the young.”
     The ‘Self-Bank’ is an interim product before Internet banking, a sector where ING Bank has considerable international experience.
     “After paying their bills a Self-Bank, the next step is paying in on the home computer.” Negritoiu says ING Romania will “most probably” launch Internet banking by the end of the year. But the future is not totally bright for Romania’s 35 banks.
     “Consolidation will take place,” says the banker. “The banks will get together more from outside Romania than inside. The problem will mean branch overlaps.”
     But there will be no blood on the walls.
     “No bank will close,” he says. “The advantage is that they are internationally controlled.”