President's Message

     During the years, the cooperative banks have aloways complied with the cooperative principles, established on international level, they being established as associations of individuals, voluntary united, in the purpose of complying their common needs and aspirations, of helping the associated members, and the decisions of the general assemblies are being taken in a democratic manner, based on the principle one person - one vote. They have statute of affiliates to the Central Cooperative Bank and from the point of view of the financial-banking activity, they are attended by 17 agencies of CREDITCOOP, judiciously distributed in the territory.

     The Central Cooperative Bank coordinates the activity of the cooperative banks from the CREDITCOOP network, issuing compulsory regulations, watching them from the prudential point of view, controlling and representing their interests in the relation with the state institutions and other organisms.

    

     In the year 2010, it has been still ascertained a deterioration of the international financial and economic environment, it being marked by uncertainties. The current external climate marked also Romania, by getting worse the risk perception, the contraction of the external selling markets and difficulties in the external financing and on micro-economic level, by doubling the liquidity risks with the one of solvability .

     But we have the satisfaction to ascertain that also the difficulties met in the second year of crisis have been left behind by the credit cooperative organisations, who have registered profit on consolidated level, even a better one than the previous year, most of the cooperative banks ending their activity with positive results.

     Considering the special duties that are due to the CREDITCOOP Central Cooperative Bank, with regard to insuring the stability of the whole system, we act on all the levels to constantly maintain a proper liquidity to practice a proper interests policy, both for deposits and loans, and for the development of a prudent lending activity, in compliance with the Strategy of market development. Also in the year passed, our units found solutions to keep the existing clients and even to attract new clients, the credits increasing in a rhythm very closed to the one of the previous years.

     On December 31, 2010 in the CREDITCOOP network, 48 cooperative banks and 784 secondary locations in the whole country were operating, in which 2,100 employees were working. At the CREDITCOOP Central Cooperative Bank and its 17 agencies from the territory, 181 employees were working, out of which, 83 at the headquarters and 98 at agencies.

     Even in the existing conditions of the manifestation of the economical –financial crisis, the cooperative bank have carried out their activity in a normality climate, more difficult being the first part of the last year. If in 2009, the economic crisis was felt also in the CREDITCOOP network, as it happened in the whole banking system, in 2010 by a more peculiar attitude toward the issues of maintaining and attracting new deposits, on the grounds of sufficient financing sources, a harsh struggle has been done to increase the lending activity. Under these given conditions, we have achieved an increasing rhythm of the deposits and credits which was situating at the medium level of increases of the banking system. The medium interests practiced at deposits were bigger at the beginning of the year 2010, respectively 8.8%, they decreasing toward the end of the end, to 7.4%. But, at credits, on the level of the cooperative banks, we succeeded the relative maintenance of their costs, registering even a slight diminishing toward the end of the year.

     In spite of the difficulties we faced, the financial situation from the general point of view of the network, was a positive one, respectively the activity ended with a profit on consolidated level, from a number of 48 cooperative banks, only 6 not achieving profit at the end of 2010. The good results registered at the level of the CREDITCOOP cooperative network have been achieved even in the conditions in which the financial situation of our clients deteriorated, due to the economic crisis.

     The legislative modifications appeared in the last years in the field of the credit institutions have imposed also in our network other method of approach of certain already existing activities and initiation of other new, to comply with the provisions of the new normative documents and the regulations issued by the National Bank of Romania for their enforcement.

     We have continued also in 2010 the activities of insurances started by partner companies, the money transfer operations with WESTERN UNION and also the conventions concluded to collect amounts related to credits at other banks through the units of the CREDITCOOP network. All the cooperative banks enforced the contracts concluded for collecting the invoices issued by Romtelecom S.A, Electrica S.A., Distrigaz, RCS & RDS, Enel Energie S.A, Orange S.A, Cosmote etc.

     A very profitable partnership, from the financial point of view and also regarding the potential of knowing our banking products, was the contract with the Agency for Payments and Interventions in Agriculture, consisting of the payment of subventions for agricultural manufacturers, field in which we have over 96,000 clients. In 2010, our units have carried out payment in amount of 190.3 million lei for these clients, and there are expectations that in 2011, this amount should be much bigger.

     We have to consider that we have achieved a reasonable level of the profit, also in 2010, even if the extra expenses have substantially increased, costs generated by investments with calculus technique endowment, insurance of security measures, costs with interest at the deposits on term, costs related to the establishment of the minimal compulsory reserve and costs for establishment of provisions, and also other categories of expenses with direct influence on the size of the profit.

     We have consistently acted in order to improve the indicators of banking prudence, of the solvency and of the exposure degree, to increase the value of personal funds and liquidity, to maintain the calculated level of the minimal compulsory reserve and to create the funds and reserves provided by the law. It is to noticed that the liquidity and solvability indicators were at the best levels from the last years and the solvability level is one of the best from the banking system. The value of the equity funds on the level of CREDITCOOP network was of 217.6 million lei on December 31, 2010, increasing with 4.4 million lei as the previous year, that represents 50.8 million EURO, out of which 8.6 million at the CREDITCOOP Central Cooperative Bank as for a necessary of 10 million Euro on the network level and 5 million lei at the level of the Central Cooperative Bank, provided by the regulations of the National Bank of Romania. Also, even in the unfavourable economic context of the last year, the level of the outstanding debentures, on the gross value, increased in a slower rhythm than in the banking system, respectively from 0.88% at December 31, 2009 to 1.13% at the end of the year 2010 and the provisions established increased, in the same period, only with 4.4 million lei.

     We have enhanced the efforts to improve the internal control system on the level of the cooperative banks, enforcing the Regulation of the National Bank of Romania nr. 18/2009. Therefore, we have paid a special attention to the activity of risks management, by adopting some concrete measures and by achieving all the internal regulations in this field.

     The CREDITCOOP Central Cooperative Bank showed an increased exigency on the line of fulfilment of the attributions conferred by the law regarding the regulation and surveillance of the cooperative banks. The review of the personal regulations in the field of the activity of surveillance, internal audit, compliance and, administrative, technical and financial control, and also the trainings organised with the personnel from these fields, in which over 137 employees have participated, have determined a qualitative increase of the control and surveillance actions on the level of the cooperative banks. On their turn, also the cooperative banks have enhanced the efforts for the efficiency of the personal activities of compliance, risks management and internal audit in the purpose to insure the integrity of the patrimony and to perform all the operations in full legality.

     In order to achieve the objectives provided in the strategy of informatisation of the CREDITCOOP network, based on the experience achieved to the elaboration of the Informational System of the Credit Cooperatives (SICOC) has been implemented and permanently updated the application the Informational System of the Cooperative Banks (SIBANC), during the year 2010, in a modern technology, in compliance with the requirements of the legislation en force, of alignment to the European Union norms, one of the major problems being the implementation of the “four - eye” principle to all the banking operations and with priority, to the ones with high risk.

     Following the analysis and reporting requirements, 2 other applications have been developed, respectively, the Information Reporting and Centralisations System SIRAC and INFOBANC –application managing a “historical” data base uploaded with data since 2006, a true data warehouse on the level of a cooperative bank, that shall allow us to perform statistic processing as requested for the elaboration of the personal calculus pattern of the provisions for credit risk and interest, as it is provided by the IFRS implementation project from January 1, 2012.

     Even if we can consider that the most difficult period of the economical financial crisis has been succeeded and the most difficult moment passed, the year 2011 shall be a challenge for the increase of the lending activity. Considering that the liquidity crisis no longer is present and the population savings appetite shall considerably increase as for the previous year, we consider that all the premises for the revival of the lending activity in 2011 are being created.

     We have all the economical and financial levers to consolidate the position on the banking market if we shall know to build customer loyalty to the traditional clients and to attract new clients to our units. In spite of all the difficulties had in the last years and that we still face due to the specific of our activity, respectively, the large number of the existing units and large operation costs, being a banking network to which cooperative banks with legal personality are being affiliated, we are confident in our collective power, in the cohesion of our system, in our employees, to whom we have appreciated the loyalty toward the institution that trained them and defined the professional career.

     We are sure that from the organisational point of view, generally, our cooperative credit system is well organised, because the organisational structure of each cooperative bank is complying with the volume and complexity of the activity performed. We have enough financial resources to carry out the activity, we benefit of a proper infrastructure, respectively personal locations, most of them arranged in compliance with the banking requests and pretensions, we benefit of a performant information system, able to limit the risks in the activity.

     We consider that all the premises are complied to substantially reduce the operation costs of our network, even if it has a considerable coverage, and through the development of the activity and increase of incomes we can accomplish a lot, stimulate and build the loyalty of the personal employees and of the associated members. We have worked and we shall continue working together for the prestige of the cooperative banks and for their consolidation, as component units of the Romanian financial – banking system.

     We look with confidence toward the future of the credit cooperative organisations from the CREDITCOOP network, because there is enough economic and human potential to increase the personal activity, considering that in the last year, most of our 2,300 employees have achieved a proper banking experience, are professionally trained and respect their company, the working place and clients.

     Any business implies a risk, and in our case, the risk can not be neglected but it can be considered and its effects can be inclined in our favour. The fact that almost 99% of our credits portfolio is addressing to the individuals, out of which 55% are residing in the rural environment, that we grant credits only in national currency, this way, no currency risk exists, that we had no exposures toward real estate developers, who present the well known risks, that the average value of a credit is about lei 5,100 and the maximum granting terms are not exceeding 5 years, are arguments to appreciate that the risks from the personal activity, even if, such risks exist, they can be well controlled and managed. In these conditions, the more difficult period of the year 2010 has been well overcome by our organisations and the Central Cooperative Bank has been an active presence on the inter-banking currency market, being in the position of net placer and purchasing government securities in a monthly average of 66 million lei.

     As also for the all economic agents, the global economic crisis is representing a new attempt for the cooperative banks, thing that has to determine the administration boards, on all the levels, to adopt new directions and strategic objectives, in order to be able to overcome well the effects of this unwanted phenomenon. In all we are doing and throughout the manner in which we act, we consider that we are viable and loyal partners to our associates and clients and this is how we want to exist also in the future.

     Also, this year, we are decided to accomplish all we have put in mind to do, to accomplish the strategic objectives that we have foreseen- that are realistic and with a quite low risk potential, to overstep the difficulties and to fructify the experience that we have achieved in the last years, for the development of the units from the CREDITCOOP network. The confidence in the future of our system is due to the fact that we are an united collective, made of good, correct, loyal and respectable professionals.

     Who knows us can find in the pages of this publication, real data regarding the activity of the cooperative banks and of the CREDITCOOP Central Cooperative Bank, to which they are affiliated. Who does not know us, can meet our activity, a viable cooperative network, and we allow to say, certain on its existence and valences.