Email addresses: oamuntean@yahoo.ro corneliu_tudor@yahoo.

com

Assessment of an entrepreneurial company Prof.Dr.Carmen Paunescu

Muntean Oana and Tudor Corneliu

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Table of Contents
Project Statement...........................................................................................................................3 1. BRDs history in numbers.... .....................................................................................................4 2. Banking industry and its related services ..................................................................................6 2.1. Banking industry.................................................................................................................6 2.2. BRDs Services...................................................................................................................8 3. Resources identification and allocation .....................................................................................9 3.1 Human Resources ................................................................................................................9 3.2. Material Resources (Assets) ...............................................................................................9 3.3. Financial Resources ..........................................................................................................11 3.4 Information Technology ....................................................................................................12 3.5 Banking Infrastructure .......................................................................................................12 4.1 Lending and deposit business ............................................................................................13 4.2 Securities issuing ...............................................................................................................15 4.3 Foreign Branch Banking ....................................................................................................15 4.4 Trade Finance ....................................................................................................................16 4.5 Corporate Finance..............................................................................................................16 4.6 Asset management .............................................................................................................16 4.7 Foreign Exchange Trading ................................................................................................16 4.8 Miscellaneous Banking Services .......................................................................................17 4.9 Conclusion on business roll ...............................................................................................17 5. Risks ........................................................................................................................................18 5.1 Credit Risk .........................................................................................................................18 5.2 Market Risk .......................................................................................................................18 5.3 Interest rate risk .................................................................................................................19 5.4 Foreign exchange risk ........................................................................................................20 5.5 Liquidity risk .....................................................................................................................20 5.6 Operational risk .................................................................................................................21 6. Business model ........................................................................................................................22 6.1 BRD Businesses ................................................................................................................22 6.2 The values of BRD ............................................................................................................22 6.3 Brand Values .....................................................................................................................22 6.4 BRD Main Competitive advantages ...............................................................................23
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6.5 SWOT Analysis .................................................................................................................23 6.6 Suppliers ............................................................................................................................24 7. Impact on society ....................................................................................................................26 7.1 The Regional Operational Program (POR) .......................................................................26 7.2 The Sectorial Operational Program ...................................................................................26 7.3 CSR ....................................................................................................................................27 7.4 Citizen Act Together think up the future ........................................................................28 7.5 Sport events .......................................................................................................................29 8. Profitable and balanced growth strategies ...............................................................................30 9. Assessment of entrepreneur ....................................................................................................32 10. Conclusions ...........................................................................................................................33

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Project Statement

We have chosen BRD for, first of all, being deeply anchored in the Romanian economy and connected to the global community and in the second place, after it had been bought by GSG in 1998, efficiency of banking services lead to more efficiency of resources allocation and risk management in the economy as a whole, resulting in a more efficient and competitive economy in Romania. Nevertheless, the financial market in Romania is still emergent and thus, banks continue to have the monopoly in financing. It is even proved by statistics that the alternative for the bank credit is insignificant, either the capital market, the leasing or the microfinance or the credit companies, mortgage societies (for personal loans) does not represent a real option. Therefore, the functioning of the market economy cannot be imagined without strong profitable banks. Another motive could be the fact that this entrepreneurial company had been awarded in 2009, in the middle of the financial crises, with the title The Bank of the Year in Romania, by prestigious publications specialised in the financial and banking fields, such as The Banker and Global Finance. In terms of advertising and image, the first picture that comes to our mind is the one regarding the association's image campaign between BRD and the Romanian legendary athletes. The strongest message is that you can rely on it in the process of becoming big, touching together the heights of success, all with the proper trust received from your partner, the bank. And in modern times, post 2009-2010, the crisis years, there is a tremendous challenge in terms of reconciling society with the image of banks and rebuilding trust.

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1. BRDs history in numbers....

1923- National Company for Industrial Lending The National Company for Industrial Lending as a public institution is created in terms of 20% of the share capital held by the State, 30% by the central bank and 50% being held by individuals, amongst whom a group of former directors of Marmorosch Blank & Co. The institutions mission is to finance the first development stages of the industrial sector in Romania. 1948- Investment Credit Bank After WWII, being in action the Nationalization Law of June 1948, the National Company for Industrial Lending passes into the property of the State, becoming the Investment Credit Bank. 1957-Investment Bank In Romania, the financial system is reorganized and therefore, the Investment Credit bank handles a monopoly position for the medium and long term financing for almost all the Romanian industrial sectors. Besides this, it takes a new name and becomes the Investment Bank, which granted the World Banks majority funds. 1990 Romanian Bank of Development The Romanian Bank for Development is set up as a joint venture commercial bank, taking over the assets and the liabilities of the Investment Bank. 1998- SGs ownership In this very year, a sell-purchase contract is signed between Socit Gnrale and the State Ownership Fund, whereby Socit Gnrale subscribes for a 20% increase of the share capital and purchases a stake so that its ownership reaches 51% of the increased share capital. 1999- European Bank for Reconstruction and Developments ownership The State Ownership Fund sells to the EBRD 4.99% of BRD's share capital. 2001- Bucharest Stock Exchange BRD is listed at the Bucharest Stock Exchange.

2003-Rebranding Following a rebranding campaign, BRD - Socit Gnrale Group aims to consolidate the Bank's position and to render the public more aware of the identity of the parent company.

2004- SG increasing ownership stake SG purchases the residual shares held by the Romanian State at BRD, increasing its ownership to 58.32%.

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[...] and in actions...

2004
BRD GSG launched a new customer oriented concept: BRD Express, developing the segment of retail banking.

2005 Brand and Communication Strategy implementation: BRDs image association (unique cards programme) with G. Hagi, I. Nastase and N. Comaneci plus BRD-10 years campaign endorsement. 2007 BRD introduced new and innovative concepts on the Romanian market BRD Express, BRD 24H, BRD Blitz, BRD Caf, in response to the market needs. BRD targets new segments- young people through differentiated products and services. 2008 In December 2008, BRD counts 2.6 million active individuals and corporate customers and more than 2.3 million banking cards. BRD is also one of the most active companies using the Internet for promotional campaigns. 2009 BRD and Gecad ePayment launched the card BRD ePayment-created especially for the customers of electronic commerce. 2011 BRD launched a contactless card for transportation.

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2. Banking industry and its related services

2.1. Banking industry
To have a clear picture about the Romanian banking market, it is needed to take into consideration different perspectives that prove its great potential: The first point of view concerns the markets reduced dimensions that allow an accelerated development in the near future. The second is the need for banking products and services among the retail customers, a dynamic segment that largely overlaps the characteristics of the middle class, which supported the spectacular growth of the Romanian economy during the past few years. The third argument is the need for financing of the governmental institutions and local communities. At last, the development of small and medium-sized enterprises generates an important demand of financing from their part, thus representing a clientele segment which more and more banks strive to attract. There are 42 banks (out of which 10 branches of foreign banks) registered in Romania that compete for a highly fragmented market. Moreover, top 10 banks accounted for slightly over 72% of the banking assets and the concentration rate of top 5 players is estimated at around 50%. 1. BCR remains the undisputed leader in the Romanian banking system, but with a slightly decreasing market share. It came last year on the market with something innovative in order to respond better to the current market context, in terms of three new subsidiaries BCR Support Collect, specialized in debt collection, BCR Procesare, specialized in cash processing and a company specialized in real estate asset management. 2. BRD, the second player by total assets, registered a market share of 14.8%. In this context, BRD-GSG positions as a bank that is solid and open to all customer segments, a bank in full development, with a team of over 9,000 persons providing quality services in more than 700 units. BRD is the leader on the consumer loans market, the main financial backer of small and medium-sized enterprises and partner of most large corporations, both Romanian and multinational.

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Figure 2.1 BRDs market shares on different segments 3. Volksbank finished the first quarter of 2010 on the third position, by sustaining its market share around 6.1%. In just five years, the bank has had a great evolution from the middle of the ranking to the 3rd position, relying almost exclusively on mortgage lending for growth. Therefore, the main focus is towards optimizing debt collection and ensuring profitability. 4. Alpha Bank registered a spectacular evolution during 2009 and the beginning of 2010 in terms of asset growth, gaining market share, having the biggest exposure to Romania in terms of loans granted. The banks main objectives include paying special attention to retail lending, while focusing on credit cards and retail loans, in attempt to balance its loan portfolio composed mainly from corporate loans. 5. CEC Bank, the only top-ranking bank under state ownership, continued to increase its market share to reach 5.7%. The bank continues to target the structural funds lending segment, as well as the agricultural sector. 6. UniCredit iriac Bank finished 2009 on the sixth place, and managed to increase its market share. 7. Raiffeisen registered an abrupt decline in market share but its profitability remained high , after an aggressive branch expansion in 2008, Raiffeisen focused on increasing efficiency, and managing its portfolio. 8. Banca Transilvanias main target announced by the bank is increasing its market share by aiming a double-digit growth rate in its loan portfolio. 9. Bancpost faced difficulties with both the banks market share and profitability. Excluding Volksbank, the institution is the only top-ten bank that had losses, more that that it is about the biggest loss among banks operating on the market. 10. ING Bank managed a 3% market share and planed to focus more on corporate clients by being involved on the retail segment and assume greater risks by boosting lending.

Figure 2.2 Romanian banks market share in loans Having in mind this top ten and the banks in response actions, the strategies and their growing orientation towards the customer shows that they are following the behaviour of banks from more developed economies. Financial activities will be separated according to customers, not to their intrinsic nature. Therefore, there is a services integration trend due to the customers request of complete financial services packages.
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2.2. BRDs Services

All in all, its business mix is structured around three core businesses: Retail Banking& Financial Services -

Current Accounts Deposits Accounts Money transmission Foreign exchange Visa debit card Credit facilities Treasury facilities
Wealth Planning and Fiduciary Services eBanking Specialised Services

Financing for individuals Private pensions Life insurance

Global Investment Management &Services Trading Brokerage Asset Management Consulting services Deposit/safekeeping of securities Market operations Hedging operations

Corporate Banking 1. Large corporate customers (BRD accompanies the main players in the economic sectors) E.q. 1. BRD signed a revolving credit facility with Petrom (OMV Group)-EUR 375 million. 2. BRD and Suez Group signed a credit facility of EUR 40 million. 3. With Kaufland- a credit contract of EUR 50 million. 2. SME and freelance customers 3. European Funds Specialised services: International Operations Factoring services (3rd ranked worldwide) Leasing: BRD Sogelease ALD Automotive-full operational leasing and car fleet management

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3. Resources identification and allocation

3.1 Human Resources
9.227 employees of BRD and SGGs entities in Romania 524 new employees 86% of the personnel attended at least one professional training course

BRD is probably the first company in the market that focused on attracting applications from different fields of activity, other than banking. Thats the reason for which the integration and professional development programs are so important in terms of ensuring the new employees an initial training program- accumulating more than 30.000 trainings/ person sustained by School Agencies set up in Bucharest, Iasi and Predeal and 30 specialized trainers. The interest is not just in developing the new employees skills but in a development track established and sustained through personalized forming programs in order to comply with a diversified range of needs. Within the HR Department, the activities and projects focused on the employees' career management, referring to professional training, identification of high-potential persons, performance management system, but also the optimisation of the HR activities. The internal mobility of the personnel remained significant (14.79%), reflecting the structures capacity to adapt to the requirements of the macroeconomic context. Also, promotions increased slightly compared to 2009 and represent 7.68% of the total number of employees. Some key points regarding professional training: - Budget amounting 400.000 Euro - Over 7000 trained persons - 450.000 training hours

3.2. Material Resources (Assets)

Figure 3.1 Assets BRD 31, December 2010 (balance sheet)-thousands RON
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3.2.1 Loans and advances to customers Banking interest margin revenues (difference between interest paid on deposits and received from loans) continued to increase in 2010 despite government calls to make it easier and less expensive for consumers to take-on loans. As I stated before, BRD is the second after BCR in terms of total assets but the leader when it comes to loans to consumer market (31 billion RON). Nevertheless, in general, loans and advances to customers is the most important one for all banks because they are the primary source of interest revenue. Specifically, we talk about loans to consumers (home loans, personal loans, automobile loans, credit card loans) and businesses (real estate development loans, capital investment loans). The dynamism of the bank loan market in Romania is predominantly supported by the loan granted to the population, which registered a fast increase determined by the diversification and attractiveness of the offers of the credit institutions, as well as by the increase of the demand of the population for consumer and real estate loans. In BRDs figure there is a slight involution, explained by the Romanian consumer situation, post financial crisis and economic crisis in the meantime, meaning a decreased income, high inflation, high interest rates, so on and so forth. No wonder that the recession in Romania has adversely affected the quality of banking assets. Lending was heavily affected by industrial activity and low consumption at the end of 2008, with credit disbursal declining in all areas in 2009 and 2010 with the exception of mortgage loans through the governments First Home programme. In addition, the number of bad loans has increased, with improving asset quality being the main challenge currently facing local banks. 3.2.2 Financial assets available for sale Any financial assets designated on initial recognition as available for sale are measured at fair value in the balance sheet. Fair value changes on AFS assets are recognised directly in equity, through the statement of changes in equity, impairment losses and (for interest-bearing AFS debt instruments) foreign exchange gains or losses. The cumulative gain or loss that was recognised in equity is recognised in profit or loss when an available-for-sale financial asset is derecognised. 3.2.3 Investments in subsidiaries and associates An associate is a company in which another company owns a significant portion of voting shares, usually 2050% and the owner does not consolidate the associate's financial statements. Ownership of over 50% creates a subsidiary, with its financial statements being consolidated into the parent's books. Associate value is reported in the balance sheet as an asset, the investor's proportional share of the associate's income is reported in the income statement and dividends from the ownership decrease the value on the balance sheet. BRD develops, and offers through various subsidiaries and other business entities, its wide range of products and services designed to increase profitability, improve service to customers, and respond to technological innovations and competition. These subsidiaries and other business entities include operating subsidiaries, financial subsidiaries, bank service companies from the biggest cities in Romania, etc.
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3.2.4 Property, plant and equipment This includes the buildings, land, furniture, and equipment owned by the bank. While this is what most people probably think of as assets, it is relatively minor for banks.

Figure 3.2 BRDs assets structure

3.3. Financial Resources

BRD is actively involved in identifying financing solutions for the beneficiaries of European funds, by adapting its banking products and services to the customers needs. One of the stakeholders, EBRD is boosting the availability of financing to the real economy in Romania, with a EUR 50 million credit line to BRD-Groupe Socit Gnrale for on-lending to private small and medium-sized enterprises (SMEs) and corporates. This project is a continuation of the EBRDs successful relation with BRD Groupe Socit Gnrale, that provided the bank with over EUR 121 million in various financing packages. The EBRD investment is part of a joint pledge by the EBRD, the World Bank Group and the European Investment Bank (EIB) to provide EUR 25 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis. Also, BRD can offer loans which can be granted from EIB funds, for: Micro customers (investment loans, working capital loans, mortgage/real estate loans) Corporate clients(SMEs and large companies) (investment loans, credit lines, credits that are used to finance expenses and temporary / seasonal stocks) Municipalities and other public entities( investment loans, financial lines for investment projects).

Summing up, in 2011 were concluded contracts for the financing of SMEs from international sources, meaning EIF, EIB. EBRD aprox. 300 million euros.
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3.4 Information Technology

In order to be competitive, the Romanian banks relied on intensive use of information technologies. This approach allowed: synergies in mergers/acquisitions of banks, product and process diversification, giving incentives to those operational areas that show high profitability, achieving customer loyalty and empowerment by introducing self-serving and increasing reputation. Therefore, BRD has invested more than EUR 15 million in the IT production centre, which operates more than 50 million transactions/ month and provides back-up facilities of simultaneous transmission of data. The Computer Centre manages production of over 800 systems operating points of the bank, with the bank and its subsidiaries 280 servers and 100 network devices. In relation to the human resources, 3 years ago an e-learning platform was launched in order to partially manage the training program. In this way, the efficiency of the training programs was increased and the related costs were significantly decreased, bringing up a superior quality.

3.5 Banking Infrastructure

Most of banks are heavily investing in physical networks expansion, upgrading also their remote channels (internet, call centre, IVR) to improve their service level and reduce costs of transactional operations. IVR is an automated computer telephony integration system which allows providers to create complex menus which the caller can navigate by using touch-tone keypresses or via spoken commands and allow the caller to enter information such as their account number or credit card details without the need for operator assistance. Vocalis centre was upgraded to be accessible even for legal persons, a centre that assured until this year all the actions that a natural person can do with own money or own bank account. Therefore, calling their Vocalis centre, the costumer is not required to be face to face with a front desk BRD representative. Moreover, a regional customer service centre was built in order to regroup the entire BackOffice activity of the territorial groups of Bucharest.

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4. Business Role
We all think we know what a bank is and what it does. And not without reason: most people have had experience of at least one bank, even if it is only through having a salary account or withdrawing cash from an ATM. Banks are widely held to be powerful and rich. This view is generally based on the very accurate observation that banks deal with vast amounts of money. A quick look at a bank's balance sheet quickly puts this perception into perspective: in contrast to industrial companies, more than 90% of a bank's balance sheet consists of loans and deposits; the proportion of tangible assets such as buildings, machinery, etc. is minimal. What is generally most striking in a bank's balance sheet, however, is that the (un-weighted) portion of equity rarely exceeds 5%. The proportion of borrowings is far higher. This is, of course, in the nature of the business: banking means working with and managing outside capital entrusted to a bank by, for example, people like yourselves, the companies you work for or your pension fund. Unlike the people who actually own this capital, banks have very limited powers when it comes to deciding what should be done with the money. Regardless of how individual aspects are structured, a bank's business policy will always have to be geared in equal part to the clients of that bank and its owners. Clients choose a bank because they trust it not to lose their money and because they expect a specific level of value added and are willing to pay fees and commissions in return. The same applies to the owner who makes his or her capital available to the bank, thereby taking on certain risks and expecting to benefit from part of the profit. Commercial banks do not create money - they are simply the intermediaries that move money from the capital markets to businesses and institutions. Banks get their money through business checking or deposit accounts, service fees and by issuing certificates of deposit (CD) and banker's acceptances--money market instruments that are collateralized by letters of credit (LOC) used in trade finance--and commercial paper. Commercial banks offer services such as trade finance, project finance, payroll, foreign exchange transactions and trading, lock boxes for collecting payments and general corporate finance. Without commercial banks, the international finance and import-export industry would not exist. Commercial banks make possible the reliable transfer of funds and translation of business practices between different countries and different customs all over the world. The global nature of commercial banking also makes possible the distribution of valuable economic and business information among customers and the capital markets of all countries. Commercial banking also serves as a worldwide barometer of economic health and business trends. A bank's activities in all its divisions can basically be simplified as follows: it transfers money and information, and in doing so transforms money, maturities and risks and BRD SC is no exception. In the next paragraphs the main lines of a bank's business will be examined how it does this, the value added it creates, the risks it encounters and the restrictions to which it is subject: (1) lending and deposit business, (2) securities issuing, (3) foreign branch banking, (4) trade and corporate finance, (5) asset management, (6) foreign exchange trading and (7) miscellaneous banking services.

4.1 Lending and deposit business

BRD's role as an "intermediary" is clearest in the credit and deposit business. Clients "bring" to the bank their savings, i.e. the money they have chosen not to spend. The bank transfers this
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money to its credit clients in the form of loans. What is on the face of it extremely simple is nevertheless fraught with a great many risks. A bank's loans lack liquidity, either partially or totally. This means that the bank cannot sell them in return for demand deposits or central bank funds whenever it likes. On top of this, a borrower's credit rating may change during the life of a loan, thereby changing the value of the loan at that point in time, which reflects the interest and amortization payments expected in the future. Due to the lack of a secondary market, credits are mostly carried in balance sheets at their nominal value, with provisions and writeoffs only being formed or affected if there are any indications that the borrower may have trouble meeting payments or is actually in arrears. In some cases, credits may even become entirely worthless if borrowers become insolvent and bankrupt. On the other side of the balance sheet, BRD guarantees its creditors the nominal value of their deposits plus interest due, irrespective of the profit or otherwise made in lending transactions. Furthermore, the amounts the bank owes are generally more liquid than the amounts it is owed; in other words, creditors can call in the amounts the bank owes them more quickly than the bank can call in what is due to it from its borrowers. One of the banks' fundamental roles in the economy is to "transform" maturities in this way at its own risk. This is part of the service it offers as intermediary and a form of risk management. Another function which BRD performs within an economy is rating and selecting the loans they finance. The supply of client deposits is limited; the demand for credit generally less so. This being the case, credits have to be subject to a selection process. The reason why this selection process cannot be performed solely via the price (or rate of interest) is that lending transactions are not the same as cash transactions, where payment is provided immediately upon a product or service being rendered. Instead, the borrower undertakes to make future payments of interest and principal. As a consequence, the bank cannot base itself solely on the ability to pay as presented at that particular point in time; it also has to attempt to make some sort of assessment with regard to the borrower's ability to pay in the future. Through their activities as "agent", another essential function performed by BRD is to reduce risks overall. A bank that uses deposits from a large number of private households to finance loans to a large number of companies is leveraging the advantages of diversification. Insofar as depositors take the decision to withdraw their funds independently of one another, the bank benefits from the Law of Large Numbers, given that it is not anticipating a situation where all depositors withdraw their savings at the same time. Diversification places a role in the lending business, too, this time over a large number of companies and sectors: a proportion of individual risks is evened out on aggregate and the bank functions in much the same way as an insurance company. As financial intermediary, BRD has a responsibility towards both their borrowers and creditors. Their prime responsibility is that towards their creditors. Together with protecting the function and reputation of the bank, the main aim of the law on banks and savings banks is to protect creditors. There is no similar protection under public law for those who have been lent money by a bank. The rights of such borrowers are covered in particular by the private contract which they have entered into with the bank. Within such contracts, banks generally undertake to provide specific products or services. They also contract to fulfill their due diligence and fiduciary responsibilities towards their borrowers. There is no legal obligation upon a bank to grant a loan to its clients under certain circumstances. Indeed, the banks could not possibly be subject
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to such an "obligation to contract", and for an obvious reason: it would be diametrically opposed to the aim of protecting creditors. This said, there have been and there are still banks which function mainly upon the principle of providing cheap loans or allowing co-operative structures to become self-sufficient in loan provision.

4.2 Securities issuing

Loans account for only part of the long-term financing provided by BRD. While bank loans are often the only source of outside financing for many small and medium-sized enterprises, a substantial proportion of the capital raised by larger companies comes from the issuing of securities. This is also reflected in overall asset structures: banks hold more in bonds in their clients' portfolios, compared to the client deposits carried in the banks' balance sheets. In a securities issue, BRD or any other group of banks generally agrees to underwrite the entire amount of the issue. The securities acquired in this way are then offered for public subscription for the account and at the risk of the bank or banks involved. The risk that not all the securities will be placed with clients is carried by BRD. The issuer, for its part, has immediately available to it the entire proceeds from the transaction, regardless of how successful the offering has been. For a bank to be successful with an offering, it has to be able to gauge market conditions correctly at the time of the issue and has to have access to as broad a base of custody account clients as possible, in order to place the securities with these clients. Securities issues are a volatile source of earnings, as we have seen over recent months with IPOs in particular. They can be lucrative, especially if they do not only involve the simple issuing of fixed-income paper but are structured around more complex transactions in several currencies with the aim of, for example, financing an acquisition. In transactions such as these, the in-depth analysis and specialist knowledge a bank provides are critical. The universal banks active in the issuing sector face a whole range of potential conflicts of interest, given that issues often involve various parties from within and outside the bank and that these parties are not motivated by the same interests: the issuance unit is interested in the offering, securities trading is looking for high revenues, asset management clients expect the bank to safeguard their interests irrespective of its role in the issuing transaction, the lending unit may have information on the issuer that is otherwise not in the public domain, etc. Defusing and controlling potential conflicts such as these places enormous demands on a bank's organizational structure, processes and compliance activities. Only when a bank succeeds in controlling the potential conflicts and managing them on a transparent basis can the different stakeholders involved be sure that their legitimate interests are equitably upheld.

4.3 Foreign Branch Banking

Some small commercial banks limit their reach to the local business community; but as business has gone global, so have commercial banks. Large banks such as BRD, Barclays or Citigroup are retail (consumer) banks that also maintain full commercial banking activities in many countries. These larger banks may act as affiliates of smaller banks that do not have branch presences in other countries. Through foreign branch banking, multinational companies (like Societe Generale) can consolidate their financial business at a single bank that handles their trade finance, currency transactions, project loans, payroll, cash management investments and deposit accounts throughout the world. Commercial banks also arrange deals between their customers globally, including strategic partnerships and project fulfillment agreements.

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4.4 Trade Finance

Commercial banks doing international business are also called merchant banks because they finance trade between companies and customers located in different countries. This is done by issuing LOCs that indicate the customer has deposited the full amount due on an order with a company located in a different country. The seller company can then feel assured of being paid if it ships goods to its offshore customer. The LOC may also be used by the company to guarantee a manufacturer's loan, allowing it to finance the manufacture of the goods to be delivered. Without LOCs, companies would face considerable expense in investigating their foreign customers to make sure they are legitimate and creditworthy, and complying with laws and regulations of the different countries in which they do business.

4.5 Corporate Finance

Companies always need to borrow money to cover purchases of raw materials, machinery parts, inventory and/or payroll. Banks with overseas branches or affiliates can simplify the process of corporate finance throughout a company's organization by consolidating the transaction procedures, reporting and record keeping. It is much easier for a company manager to do business in her own language with a banker located nearby who handles her global business finance needs than it would be for her to develop banking relationships in every country where she does business. Her international commercial bank can also provide referrals to professional service firms in other countries, as well as arrange introductions to other companies appropriate as customers or for strategic partnerships.

4.6 Asset management

Asset management covers a range of banking activities: portfolio management, investment advisory, securities trading and lending business (collateral loans, securities lending and borrowing). With a discretionary portfolio management agreement, clients authorize a bank to undertake, for their account and at their risk, all the actions it deems appropriate within the framework of the normal asset management activities of a bank. Clients expect their assets to be managed professionally and in their best interests. BRD contracts to exercise its undertaking to the best of its knowledge and abilities, taking into account clients' circumstances but acting as it sees fit within the scope outlined as part of the investment goals defined with the client. What is clear from this is that the singularly most important factor in asset management, independently of any law or regulation, is the trust a client has in his or her bank. The guidelines specify that a bank which accepts portfolio management agreements must have appropriate professional organizational structures which are commensurate with the activities involved, that concentrations of risk must be avoided, that, where there are no instructions to the contrary, the bank must invest in securities for which there is a ready market, etc. The asset management business places exacting requirements on banks and bankers in terms of the expertise and ethical issues involved. Under no circumstances can a bank simply "do as it pleases" in the portfolios it manages for clients, nor should it be allowed to do so.

4.7 Foreign Exchange Trading

Another business or function that has to be mentioned, was foreign exchange trading, an activity which has been unjustly attacked as "casino capitalism". Various factors have given rise to this perception. First, without a doubt the massive amounts traded in the foreign exchange markets every day. The vast majority of this trading takes place between financial
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intermediaries, the aim being to exploit even the slightest differences between exchange rates (arbitrage). Only a very small proportion of these trades is used to finance foreign trade and hedge foreign currency positions. Furthermore, the fact that serious economic crises are almost always currency crises may fuel suspicions that it is currency traders with their speculative attacks that trigger such developments. In fact, the very opposite is true. Many people may fail to see the point of the vast amounts of arbitrage transactions, since they are not primarily used for financing purposes. In reality, however, they underpin liquidity in the markets, thus helping them to function smoothly. In less liquid markets, new information would inevitably lead to much greater volatility in rates. A distinction has to be made in the case of protracted currency over - or under-evaluations (in terms of interest rates and purchasing power parity), which are a genuine problem, as they could result in the misallocation of resources. In order to facilitate international trade and development, commercial banks convert and trade foreign currencies. When a company is doing business in another country it may be paid in the currency of that country. While some of these revenues will be used to pay workers in that country and for administrative expense such as office rent, utilities and supplies, the company may need to purchase goods from a neighbouring country in that country's currency, or convert cash to its native currency for return to the home office.

4.8 Miscellaneous Banking Services

Last but not least, corporate checking accounts, currency specific credit cards and lock boxes are also offered by commercial banking to help make foreign trade possible for a company. Lock boxes are particularly helpful for collecting payments from overseas customers and reporting receipts daily for cash management purposes. Currency-specific credit cards are also important in eliminating the cost of cross currency purchasing, which normally is done at expensive valuation levels.

4.9 Conclusion on business roll

By granting loans, processing payments, accepting deposits, carrying out investments, etc. it is creating added value for its clients, employees, service providers and shareholders. In this, it is no different from any other company. The real difference lies in the extent of the potential damage were a bank to collapse: Then it would not only be employees losing their jobs, shareholders losing their capital and clients their provider; clients could potentially lose their entire savings and financial assets. This explains why banks are so heavily regulated and so strictly monitored.

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5. Risks
Commercial banks are among the major financial intermediaries in the marketplace. As a result of this role, commercial banks are exposed to the risks that affect both the securities markets and the economic conditions that affect consumers. To understand the risks associated with commercial banks, it is helpful to consider some key areas that affect banking operations.

5.1 Credit Risk

The crediting activity risk is the probability of loss due to a debtor's insolvency and nonpayment of a loan. For the commercial banks on the whole, this risk has a systemic character; its extent does not result from the simple summation of the credit risks faced by the individual components of the banking system, but it is the 'synergistic' result of the propagated effects in the whole system. The lending activity is the main activity of banking entities and credit risk is the most important one out of the various risks that may affect the results of the bank financial intermediaries. Its intensity is measured by the damaging or improvement in the quality of the loan portfolio related to the customers solvency. Taking into account the fact that banks must filter businesses and promote the efficient, reliable and legal ones for the lending process, thus encouraging effective activities for all bank loan users, the estimation of financial reliability indicators represents a very important milestone in decision taking. Banks have to evaluate the potential risks of crediting a business, to investigate the reasons for asking the loan and to identify the payback resources that depend on the development of the credited business. The analysis methods currently used by banking societies are based on a series of concepts and techniques that represent the gravity center of technical and quantitative analysis of crediting. Furthermore, banks prove a great dependence on the financial reliability indicators and the guarantees presented by the loan applicant, but these indicators do not always reflect the reality and even if they did, this should be only a visit card of the company, and its guarantees should be looked upon like an insuring measure, and not like a certainty for recovering the loan by their turning to good account. Nowadays, having the circumstances of the new world economic crisis, all the principles and methods for giving a loan by taking less risks on behalf of the creditors, are under a lot of pressure from both the internal and international economic environments. Even though the credit analysis considered the company to have its financial reliability indicators situated in a comfortable risk class and the presented guarantees were considered solid at the time, under crisis conditions, the company may face problems for paying back the loan. Moreover, the bank may face difficulties in foreclosing the guarantees because of the fact that their price might have decreased in time, so the resulting sums have a much smaller amount then the original amount of the loan. Theres also the uncertainty of being able to foreclose the guarantees in times of crisis, when most transactions are blocked, furthermore leading to difficulties in providing liquidity to banks, forced it to turn to extreme and expensive solutions.

5.2 Market Risk

The market risk is a basic component of the financial risk management system if the credit institutions operate on well-developed financial markets. Market risk is defined as the risk
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associated to the occurrence of losses on balance sheet and outside the balance sheet items due to changes in the market prices. The main risk categories that lead to changes in the financial markets, and which actually lead to market risk are: interest rate risk - the variation of the development trend; exchange rate risk - exchange rate variation and thus the worth value of different foreign assets and liabilities in national currency; shares price risk - corresponds to the loss or the lack of profit that may result from the change in the value of shares held by credit institutions. Starting with 1998, the authorizing institutions have required a supplementary capital reserve for the insurance covering of significant losses that might affect their stability on behalf of the banks with large trading activities. The size of the reserve, also known as the capital requirement for covering the market risk is directly proportional to an indicator which reflects the portfolio risk. Currently the market risk is measured in terms of value at risk method. The VaR risk measure is a popular way to aggregate risk across an institution. Individual business units have risk measures such as duration for a fixed income portfolio or beta for an equity business. These cannot be combined in a meaningful way. It is also difficult to aggregate results available at different times, such as positions marked in different time zones, or a high frequency trading desk with a business holding relatively illiquid positions. But since every business contributes to profit and loss in an additive fashion, and many financial businesses mark-to-market daily, it is natural to define firm-wide risk using the distribution of possible losses at a fixed point in the future. In risk measurement, VaR is usually reported alongside other risk metrics such as standard deviation, expected shortfall and greeks (partial derivatives of portfolio value with respect to market factors). VaR is a distribution-free metric, that is it does not depend on assumptions about the probability distribution of future gains and losses. The probability level is chosen deep enough in the left tail of the loss distribution to be relevant for risk decisions, but not so deep as to be difficult to estimate with accuracy.

5.3 Interest rate risk

Interest rate risk is one of the more prevalent risks for commercial banks. Generally, commercial banks are proficient at mitigating interest rate risk in their investment portfolios. However, interest rates are outside the domain of commercial bank operations. Instead, the National Bank of Romania, exercises considerable influence over interest rates. As a result, commercial banks try to hedge their loans against any changes in the general interest rate level in the economy. For example, if a bank makes a business loan and charges the borrower 5 percent interest with a current interest rate level at 2 percent, the bank will make a profit of 3 percent if the rate remains at 2 percent throughout the life of the loan. However, if the general level of interest rates increases from 2 to 3 percent, the bank's profit will decline to 2 percent. The interest rate represents the cost of new and old financial resources assigned by bank and non-bank financial intermediaries in the process. The interest is the amount reimbursed to the owner of the loan or the price for using the capital and it also covers the potential risks of that loan. The main indicator for assets and liabilities management is the net interest margin. The objectives of asset and liabilities management reside in increasing the banks incomes out of

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investments, while decreasing the costs of the attracted resources and maintaining an acceptable risk level and compliance to the capital adequacy and bank liquidity regulations. Assets and liabilities management that collects and uses all funds represents the financial core of a bank. Furthermore, assets and liabilities management refers to strategic planning and monitoring processes that influence the volume diversity and sensitivity of interest rates, as well as the quality and liquidity of a banks assets and liabilities. The main objective for assets and liabilities management is to produce a net interest revenue flow that should be high, stable and with an increasing tendency. This level may be attained by an optimal combination of assets, liabilities and financial risks.

5.4 Foreign exchange risk

Foreign exchange risk is another component of the market risk and it depends on the market fluctuations of the exchange rate. It may be defined as being the risk of potential losses out of the exchange rate fluctuations. It is strongly related to interest rate risk. Foreign exchange risk expresses the probability that a change of the market exchange rates to adversely influence the banks interest margin. Exchange rate risk may be estimated through two basic indicators, which are the individual exchange position of each currency and the global exchange position that has the advantage of an overall overview for the bank's foreign exchange exposure and the disadvantage of overselling the currency situation, instead of managing it. Corporate sector exposure to exchange rate risk is greater than the one indicated by the internal contracted loans. This is mainly due to large companies, whose foreign direct loans increased during 2008. Furthermore, this vulnerability increases indirect exposure of banks to exchange rate risk.

5.5 Liquidity risk

Liquidity risk, also known as financing risk, is the potential risk of an enterprise to face difficulties in finding the funds for covering financial instruments commitments. Financial risk may result out of incapacity of quickly trading a financial asset for its real value. The liquidity risk expresses the probability for a bank not to be able to fulfill payments towards its customers, because of widening the long-term investments to short-term investments ratio and their lack of correlation to the liabilities structure. Long-term investments are generally greater than the short-term investments of the bank; therefore banks may encounter two delicate situations: a. not to be able to fulfill short-term commitments; b. to get short maturity resources, while their investments have long maturities. The first situation, which is also called immediate liquidity risk, is due to the massive and sudden withdrawal of its creditors. If a bank faces liquidity risk, it may be determined either to borrow emergency funds for excessive costs in order to cover its immediate cash needs or to attract new depositors by paying them greater interest rates than the ones of the market. Immediate liquidity risk is a specific risk for banks and the art of managing a bank resides precisely in knowing how to manage liquidities in order to face withdrawals, without harming the opportunities of requested loans.
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The second situation is also known as transformation risk and it requires the following considerations on behalf of banks: a. resources and investments should be judged according to their real liquidity and payability and not the legal ones. Thus, sight deposits are often more stable than term deposits, interbank deposits are more volatile than customer deposits, customer debtor accounts are often more tied up than long maturity loans. b. the financial innovation of recent years change the liquidity risk of a bank by increasing it through credit commitments development such as multi options facilities and by decreasing it through the development of negotiable claims secondary markets. The art of transforming short maturity resources to long maturity investments and quickly coping with the liquidity crisis at low costs is a specific skill of bank management.

5.6 Operational risk

The international financial markets as well as the European ones are undergoing a continuous and complex process of adapting their products and services to market competition, the development of economies and expanding globalization of economic activities. Under these circumstances, the operational risk has become an increasing important element of credit institutions because they have to redefine their own products and services in order to strengthen their market position and to penetrate new markets, because of the increased demand in financial innovative products (example: securitized products, credit derivatives, structural products). Basel Committee defines operational risk as the risk of losses resulted from inadequate or defective internal processes, people and systems or external events, focusing on the determinant causes of losses in order to differentiate the operational losses of other risk categories losses. In order to maintain their market position and to remain competitive and profitable, financial institutions must comply with the legal standards and regulations and they also have to anticipate the development of the market and to be sensitive to significant factors affecting market dynamics. The increased complexity of banking practices and the financial markets tendency to deal global transactions in real time, involve a greater supervising concern on behalf of the authorities for the financial institutions. This financial market evolution brings along new risks and exposures that have to be determined, quantified and managed, hence the need to develop robust operational risk management systems. In this context all European banking/financial institutions have adopted the regulations proposed by the Basel Committee and Basel II Accord and now are trying to put into play BASEL III regulations. The Basel Committee associates unexpected losses to operational risks, further arising from the following determinants: human errors, computer system errors, inadequacy of procedures and controls, external events.

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6. Business model
6.1 BRD Businesses
The strategy of BRD - Groupe Socit Gnrale fits into the global strategy of Socit Gnrale Group: balanced business mix, long-term growth and operating efficiency. The success of this strategy is based on the efforts of men and women belonging of all BRD units, who embrace the values of our Group. The BRD is aiming at becoming Romania's reference bank through its professional and innovating style, quality of development and profitableness Within this outlook the BRD will pursue its policy of sustained investments with a view to adapting its commercial mechanism, bringing its processing techniques at an industrial level and enlarging its range of products and services.

6.2 The values of BRD

Every day, we assist you in reaching yours goals; we are a true partner in the development of companies, towns and regions. Every day, we secure the confidence of new customers and recruiting new staff. The success of our strategy of sustainable development is based on our values embraced by all men and women of Socit Gnrale Group: professionalism, team spirit and innovation.

6.3 Brand Values

The philosophy around which BRD acts is the delivery of quality services. The brand is supported by three key-pillars: innovations, professionalism and team spirit , which form the corporate values of the bank . Other attributes of BRDs corporate image are modernity and openess. However, the banks most important asset is undisputable : people . BRD respects others , it encourages diversity by creating an environment where everyone has the opportunity to fully participate in achieving sustainable business development and personal success. The banks achievements are thanks to its more than 9000 employees who have proved their commitment and professionalism in achieving success. It is acknowledged that all effective business relaationships , inside as well as outside BRD, depend on honesty , integrity and fairness in relations with all customers . The goal that has been set is to make customers lives easier. This goal is also the slogan of the bank : Ever easier .

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The banks image is also promoted by means of several new types of banking environments: the BRD bank caf, one of the hippest place in Bucharest, and the BRD 24 hours branch , the only banking branch available 24 hours a day. Since its privatization, BRD has engaged into a voluntary development policy on the retail market, taking benefit from the synergy with the corporate customers. Its market share varies between 17% and 23%, depending on its various products. It is amongst the leaders of the banking card and consumer loans markets. The consumer credits at the selling place is carried out through its subsidiary BRD FinanceIFN . Its commercial offering is constantly growing in line with the living standard of the population.

6.4 BRD Main Competitive advantages

BRD has many advantages over tis main competitors but only a few provide the group the needed edge over them. The main elements that help BRD provide such a value to its customers are: Presence on all segments of the market retail, micro finance, SMEs, corporate clients, private banking, investing banking asset managemnt with carefully tailord products; Best network coverage over 500 agencies all over Romanian territory; Excellent knowledge of the local market combined with the commercial expertise of the Societe Generale; Efficient organization and procedures advanced integration with Societe Generales procedures, organization, risk management, internal audit functions, financial consolidation etc; Easy access to financing due to the good ratiing and SGs support; Good capacity to innovate in response to market tendencies; Close contacts with Romanian central and local authorities and international financial institutions.

6.5 SWOT Analysis

Strengths Groupe Socit Gnrale is the second Romanian bank after bank assets and holds the second cap on the Bucharest Stock Exchange. Groupe Socit Gnrale is present in the Romanian through a network of 930 agencies. On 31 December 2008 numbered 2.6 million BRD active individuals and corporate customers and over 2.3 million cards. BRD offers quality service through professional staff of 9,500. The main shareholder of BRD Societe Generale is one of the largest banking groups in the euro area, whose services are used by 27 million customers worldwide. BRD ATM network covers the entire country. Offer products and services is very diversified bank (financing products, savings products, investment services, brokerage services, Services of custody, storage etc.) BRD develops a policy of social responsibility which aims to contribute to the development of a sustainable and competitive Romanian.

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Weaknesses Vulnerability data to cyber-attacks. The efficiency of employees working in certain cases. Limiting the freedom of action by the National Bank's policy and legislative bodies. Vulnerability to competition actions. Opportunities Opening of new branches, ATMs. Collaboration and sponsorship of certain events to promote the image bank. (Sports, social campaigns) Improve services. Speculation in the market appeared certain favorable situations. Addressing new market segments or new markets (increasing the number of clients) Developing programs and innovative producers, classic alternative banking (internet banking, development of EPOS) Threats The vulnerability of any system to cyber-attacks. Some actions coming from competitors. Restriction policy of the competent bodies in the field (NBR) threats from the state (to increase tax rates) Threats from economic context (economic crisis)

6.6 Suppliers
BRD has few suppliers because it is based on own resources to provide its customers the highest quality products and services, but also employees provide a professional work environment including adequate technology this banking environment. One of them is TotalSoft, a Romanian supplier of software with the largest powers in the field and producer of the widely used human resource management system and pay in Romania - Charisma HR. Last year, BRD - Groupe Socit Gnrale launched an ample market research in order to choose which provider to assign payroll outsourcing activity. The project has a complex infrastructure hardware architecture based on four servers, which provide direct communication between TotalSoft and BRD - Groupe Socit Gnrale, security and privacy is guaranteed. TotalSoft is the leading provider of management solutions for human resources and payroll activities in Romania. Another major supplier is VISA, the largest organization of payments accounting for 57% of card market. It unites more than 21,000 banking institutions. VISA cards are issued and are accepted for payment in 300 countries and territories. In all the world are issued more than one billion cards, which are received in more than 22 million commercial points. Number of ATM,
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the cash Release via VISA, up more than 718 000. The number of Visa transactions by 31/12/99 after data exceeds 21 billion. The volume of transactions is more than 1.59 trillion dollars. The main suppliers of labor for BRD are economic faculties, especially the Academy of Economic Studies and Institute of Economic Studies Iasi, Cluj and Brasov. Commercial Banking uses more people than any other sectors of the financial services industry. Although mergers cause cuts, there are plenty of vacancies. Global expansion of current services are two points clear and growing profitability. Banks also participate in various business profitable to continue the development, such as loan management, transaction processes, mortgages and other commercial lines products. Banks turns into larger financial service providers. Introduce new hybrid products for their customers. Western banks just starting their business expansion in Romania. With existing technology, banks need traders and market sellers with experience. They must be familiar with the work and adoption of new technology in their work.

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7. Impact on society
In the last years BRD has been an active in Romanian society both through its programs to help medium and small businesses or by helping young people get a new home or through its CRS campaigns. Also besides its local programs and campaign, BRD carries further the Societe Generale vision and mission about the future. BRD also provides information and support for the main European Programs for Romania. The bank invests a lot of effort in providing a full set of services that may facilitate access to the European Founds.

7.1 The Regional Operational Program (POR)

POR has as main target supporting economic development, social, territorially balanced and sustainable Romanian Regions, according to their needs and specific resources by focusing on urban growth poles, by improving the infrastructure and business environment to make Romania's regions, especially the left ago, more attractive places to live, visit, invest and work. The strategic objective of the regional program will be achieved through an allocation of funds differentiated by region, depending on the degree of development and through close coordination with the actions under other OPs. To achieve the overall objectives of regional development, the strategy focuses on the following specific objectives: a. Increasing economic and social role of urban centers by adopting a polycentric approach in order to stimulate a more balanced development of regions; b. Improving accessibility of the regions and in particular the accessibility of urban centers and links to surrounding areas; c. Increasing the quality of social infrastructure of regions; d. Increasing the competitiveness of regions as business locations; e. Increased contribution of tourism to regional development.

7.2 The Sectorial Operational Program

POS has 6 sub programs with address different field as: a. Increasing the competitiveness The overall objective is to increase productivity of Romanian companies in order to reduce productivity gaps with the EU average. b. Transport infrastructure The program promotes in Romania a sustainable transport system, allowing fast and safe travel for people and goods, at European standards, nationally, within Europe and within Romanian regions. c. Environment The overall objective is to protect and improve the environment and living standards in Romania, focusing in particular with the environmental acquis. The objective is to reduce the
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existing gap between European Union and Romania on environmental infrastructure both in terms of quantity and quality. This should be translated into effective public services, taking into account sustainable development principles and the principle of "the polluter pays". d. Human resources Developing human capital and increasing competitiveness, by linking education and lifelong labor market and ensuring increased opportunities for participation in a modern and flexible labor market, available for 1,650,000 people. e. Development of adminstrative capacities The overall objective is to help create a public administration more efficient and effective for the socio-economic benefit of the Romanian society. f. Technical assistance Nationally, PO-TA objective is to provide support for the coordination and implementation of Structural Instruments in Romania, to ensure a reliable system for management and monitoring for these instruments and to ensure appropriate communication to the general public on interventions financed by European funds. All these objectives are reflected in the global absorption capacity and efficient mode of use of interventions of structural instruments.

7.3 CSR
One of the main concerns of the BRD-SG is the environment and the effect the company has on it. As a consequence the group started a campaign in order to reduce its impact upon the environment. BRD - Groupe Socit Gnrale announces the acquisition of carbon credit certificates, compensating and, thus, all the corresponding CO2 emissions in 2010. Voluntarily engaged in this process, BRD project started in mid-2010 Carbon Plan aimed at reducing its own CO2 emissions, with three main axes of intervention: optimizing consumption (particularly electricity, paper, fuel), increased energy efficiency of buildings and decrease the negative impact of environmental IT business. In parallel, the sites that were launched aimed at improving the reporting process, implementation of national programs in developing internal recycling and eco-responsible practices. Since the beginning of Carbon Plan, BRD has made investments of over 630.000 EUR, especially in IT projects, videoconferencing systems, energy optimization and purchase carbon certificates. At the end of 2010, BRD reported 3.52 tons of CO2 / employee, slightly down from 2009 (when he registered 3.65 tons CO2 / employee). This mechanism of reduction and compensation is part of the neutralization-wide emissions Socit Gnrale to announce that 75% of 2010 emissions associated with energy consumption, paper and professional travels have been compensated. Thus, six projects were funded: wind farm in Morocco, small hydroelectric dam in Guatemala, the production of bioenergy in India, methane recovery from waste in Argentina, wind farms and methane recovery from waste in Turkey.
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At Group level, the objective is to reduce by 11% / employee CO2 emissions during 20082012. Societe Generale announced exceeded this goal by the end of 2010, emissions / employee decreased by 14.2% compared with the end of 2007. Effort to reduce CO2 emissions will continue, BRD aiming to strengthen its environmental responsibility policy. Another program was Change a destiny. Give value to life!. BRD - Groupe Socit Gnrale invited NGOs to participate in a selection of projects under the social responsibility program "Change a destiny. Give value to life." This social responsibility program involved 1,300 employees through monthly donations BRD, donated the proceeds of which are backed by the bank. BRD intends to support initiatives to involve employees in solving community problems in which they work. In three years, the "Change a destiny. Give a lifetime value" of 220,000 total funds invested EUR 24 annual projects supporting a number of 1,450 children and young people in difficulty. The financial support that BRD wants to pay in 2011 is up 80 000 RON for each project. The total amount available in 2011 is 800 000 RON. The two axes of the program are: a. support / integration at school of children at risk; b. support / integration into employment for disadvantaged young people. Program objectives are: a. Long-term positive changes b. Decreased dependence on the social system c. Improving access to education Beneficiaries are children and young people aged 3 to 25 years in difficult situations: a. either socially (from institutional centers, poor families deprived areas) b. either permanently or temporarily affected by a physical or mental impairment but not completely dependent on others The key element of the program is clear intention to target groups to develop, to overcome a personal context unfavorable to integrate into society as actors with equal rights and capacities of any other person.

7.4 Citizen Act Together think up the future

BRD-Groupe Socit Gnrale Romania launches the sixth edition of the Citizen Act, a wide business issues of social responsibility organized by Societe Generale Group, attended universities traditionally many countries in Europe, Africa, the Mediterranean basin, North America and Asia. The project should express their view on how a bank can contribute to a more responsible world, via its social responsibility policy, the strategy of human resources, etc. This presentation is the outline of the CSR project that the team will make later.

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7.5 Sport events

BRD - Groupe Socit Gnrale and the Romanian Federation of Cycling and Triathlon renewed their partnership to support the bank to carry out Cycling Tour of Romania. Guy Poupet, President and CEO of BRD, signed and handed over to the FRCT representatives a check worth of 45,000 euros, the amount that BRD contribute to the organization of this year's edition of "Mica Bucla". BRD - Groupe Socit Gnrale sponsors of the Romanian Federation of Cycling 14 years and is, for the 13th consecutive year, ''the official partner of the Cycling Tour of Romania ", which have confirmed participation of 17 teams this year - with 2 more than in 2010 - (4 in Romania and 13 from abroad) comprising a total of 102 athletes from 21 nations, competing for teams from 11 countries. The traditional cycling competition, this year reached the 48th edition will be held on June 4 to 11.The caravan will travel nearly 1,400 miles this year will start from Ovidiu and will cross the finish line in Bucharest. The route will cross 15 counties and includes 20 sprints and 15 climbs. BRD will give the yellow jersey at the end of each of the eight stages of the competition, and winner of the Tour of Romania.

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8. Profitable and balanced growth strategies

After the economic crisis of the past few years, banks are more aware of their social responsibilities, more attentive to their stakeholders and maybe a little less self-assured. The strategy of BRD - Groupe Socit Gnrale fits into the global strategy of Socit Gnrale Group, meaning it focuses on balanced business mix, long-term growth and operating efficiency. Being an universal bank (provides services both for individuals and companies), its strategy sustains growth and profitability. To be more specific, BRD is aiming at becoming Romania's reference bank through its professional and innovating style, quality of development and profitableness. Within this outlook the BRD will pursue its policy of sustained investments with a view to adapting its commercial mechanism, bringing its processing techniques at an industrial level and enlarging its range of products and services. At the moment, one of the main priorities of the bank is represented by debt collection, more than 400 employees being currently involved in the monitoring and collection of overdue loans. Although bank's officials have stated several times that one of the main targets for this year is to continue lending operations, this can only be performed in a manner adapted to market conditions, focused on boosting procedural and operational efficiency. Since 2007, BRD pursued the expansion of its network and it continues to cover the large and medium cities, and as a present and future target- also the rural areas with potential. This very continuous development process is accompanied by an ambitious recruiting and training programme for new employees. Physical development cannot be sustained without the implementation of a relationship marketing concept, related with a change of mentality, in the attitude of the part who offers the service towards the served public. Thus, through the well trained employees information about all BRD products can be given to the customers. On the other hand, reactions and feedback of customers can be better observed by the employees through the individualised relationship. In addition to this, through better knowledge of the reactions of customers, there can also be a faster reaction of BRD in order to avoid negative opinions and negative recommendation. In accordance to the previous statements, the main objectives and values: organization and procedures adapted to the strategy of its customers, selective growth of its assets, innovation, decrease of the cost / income ratio, lasting profitability. During these years, BRDs reputation was without doubt based on its innovations. As examples: A la Carte , the banking card with a 100% customisable design, launched in February 2010, was an innovation for the banking offer in Romania. Instant Pay in March 2010, BRD was also the first large bank to introduce the contactless technology in Romania. A special project based on the contactless technology has been the subway access solution, which represents a triple innovation of BRD: innovation in terms of payment, of set-up the partnership with the subway, and of introduction of contactless cards in
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Romania. The payment is made directly from the card account, without need to buy separate travel credit. This solution has been declared by MasterCard unique in Europe. Therefore, BRD, for sure will keep walking in this innovative pathway in terms of banking products or services, action that assures loyalty of the existing clients and the delight of a young segment on the market. This will call for new investments into new levels of technology that can help offer higher levels of service to its customers and accomplish routine tasks, reducing risk of errors and fraud. The need to place major investments into the most modern and efficient IT systems available that enables top of the line business transactions to transpire unhinged. IT will allow up to date information to be at the fingertips of BRD managers, giving them a huge advantage when it comes to making decisions. In terms of HR strategy, the Bank approaches two directives: on one side, coaching new employees and on the other side, developing and implementing programs meant for proximity management, leadership programs for the strategic management level and for accompanying individualistic development of the employees. Career management is based on a behavioural competences system which is unique at the SG level and the next step is aimed to be implemented a performance management system. Specifically, it is desired a talent management program with a synergetic approach of several processes such as: - External and internal recruiting - Integration - Skills development - Career development - Performance evaluation The purpose of this program is to permanently ensure the existence of top quality employees in BRD, people with remarkable professional performances but having at the same time the necessary competences for an international career within the Group. In the coming years, business will continue to develop at a rapid pace through organic growth. Therefore, the bank will keep monitoring carefully the trends in the economy and on the financial services market and considering them when making decisions.

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9. Assessment of entrepreneur
The point to start with is the existence of an entrepreneurial culture in BRD Group and that implies a set of values, norms and traits that are conducive to the growth of it. We sustain that based on the concept that cultural values deeply affect the level of economic development, to be more specific, structural conditions make development possible and cultural factors determine whether the possibility becomes an actuality. In accordance with these statements, it is crucially important that there is an evidence of everyday actions driven by shared values. Not to forget to mention that, culture has everything to do with the entrepreneurial process and focuses on the discovery and interpretation of opportunities, neglected by others. This is the main characteristic of BRD. First of all, at the heart of BRDs corporate culture is the competitive advantage of professionalism. All strategic development choices are guided by this professionalism and by a tremendous entrepreneurial spirit. The second value is team spirit, as long as exchanging ideas in diverse and stimulating environment goes hand in hand with self-fulfilment for each individual and overall, builds effectiveness. BRDs entrepreneurial culture is more than ever proved by innovation as its state of mind. Thinking ahead become a reflex action and being constantly on the lookout for changes happening around assures at least one step in front of the competitors. Extending a bit the idea, innovation involves everyone: BRD gives each individual the opportunity and the resources necessary to contribute new ideas. In the meantime, there should be a certain statement according to which, the basis of entrepreneurial culture is not stated as being innovation for innovations sake but it should provide services that are more relevant, of better quality, and that make use of more suitable technology. For sure, entrepreneurship is not an inborn skill, it is a product of the environment. It involves a complex of economic and social behaviour and to be successful, an entrepreneur has to remain dynamic and responsible to the whole environment. That was our intend to prove in this project, that BRD is entrepreneurial but not solely for its innovative services but for the whole community brought together in means of employees, customers, culture, environment, prosperity, economic growth. Nevertheless, the ultimate objective of the economy is the human being, their environment and their happiness. This rediscovery leads to believe that the future of the BRD and banks, in general relies chiefly on a rediscovery of the human behind the customer, the employee, the working environment and the brand. The reverse of the medal is that entrepreneurial status brings alltogether even higher risks.

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10. Conclusions
All banking institutions, in their capacity of commercial banks, must not only be seen as simple businesses, but also as institutions with a real public character. Thus, the economic benefits generated by a bank are basically the redistribution of capital from those who have more than they need towards those who need liquidity. Whether it helps the individuals who typically use loan proceeds to finance major purchases, such as homes, education and other consumer spending or it supports governmental spending and investment or finance business that need money to loan to finance the start-up costs of a small business, the effect of commercial bank lending generates economic activity from customers (individual and companies) who now have the necessary funds to invest in their own endeavours. We believe that the leading companies of tomorrow will not necessarily be those with the best financial performance, but rather the most inspiring: companies which attract positive thinkers, both from inside and outside of their ranks, companies which are able to develop new ways of adding value to their customers and still working together with their stakeholders. Referring to BRD 2010 situation, the last year is not a typical year of growth but there is evidence of sensibly constant client database, approx. 2.5 million, a stable territorial network, 5 new private banking agencies and the number of employees slightly increased in 2010, approaching 9,200 in the entire BRD group. The last action, from our point of view, related to the Romanian economic environment is over expectations and infirms the trend of an increased unemployment rate. Through the investments support policy (funds from EIF, EIB,EBRD), BRD can be seen as a shaping factor of the economic process in Romania. The restructuring of Romanian banks in this direction, meaningly to suport bussiness projects through credits that they can support themselves or ventures with other banks from richer areas, must consider the overall economic development. The economic, monetary and financial banking environment is permanently subjected to a fierce competition and the appearance of unknown new risks, which manifest differently. Under these circumstances it is extremely difficult to present a certain form of risk, or to seek a precise definition, given the uncertainty feature of our contemporary world.But we may state that a strong, stable and viable economy automatically leads to the existence of a strong and efficient banking system.

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