Cetelem, Europe’s largest consumer
finance player, has added Russia to its portfolio of new markets as
it continues its strategy of entering high-growth emerging
economies and lessening its reliance on its core French business.
The consumer finance unit of BNP Paribas also recently added
Bulgaria and Brazil to its list.

François Villeroy de Galhau, CEO of
Cetelem, said: “Our deployment in Russia is in line with our
strategy of international development in high-growth countries,
[like] our recent acquisition in Brazil, Banco BGN. Our ambitions
concerning Cetelem Russia are extremely high for the next three
years and we plan to be among the top five in the market while
maintaining satisfactory levels of profitability and risk


The new Russian operation will distribute the Cetelem product range
throughout the country, said the group. It started operating
simultaneously in five major cities at the end of August (Moscow,
St Petersburg, Yekaterinburg, Krasnodar and Nijni Novgorod) and
will spread to five other cities by the end of the year. Products
will be marketed at commercial partners’ points of sales
(retailers, car dealers and manufacturers) and will be completed,
said Cetelem, by direct-to-customer credit sales.

The Russian consumer finance market is one of the most promising
markets in Europe, according to Philippe Delpal, in charge of
Cetelem Russia. “Regular growth in GDP, strong increase of
consumption, driven by the rapid improvement of the population’s
living standards, a reasonably low unemployment rate and relative
political stability, represent solid foundations for the consumer
finance market which has been making headway since 2002,” he

At the start of August, Cetelem acquired JetFinance International,
Bulgaria’s leading consumer credit specialist, affirming what the
group described as its “pole position” in the consumer finance
sector in Europe.

JetFinance has a distribution network covering more than 150 towns
across Bulgaria, offering its products through close to 3,600 sales
outlets and via its own branch network. It has 500,000 clients; its
new business volume and outstanding loans grow by over 60 percent
in 2006, a trend which continued across the first half of 2007.
“The acquisition [of JetFinance] reflects Cetelem’s keen desire to
develop its business in emerging economies and in countries that
have strong growth potential”, said Villeroy de Galhau.

In its interim results, BNP Paribas reported that Cetelem’s
risk-weighted assets rose 17.6 percent and its revenues increased
11.3 percent. Growth in outstandings in France (including its Laser
Cofinoga subsidiary and excluding industrial partnerships) was 9.1
percent in a market where overall growth, according to the bank,
was below 3 percent.

Emerging countries’ share of revenues grew to 15 percent in the
first half of 2007 compared to 9 percent in 2005. International
expansion continued with operations beginning in Ukraine, China,
Algeria and Mexico as well as the recent announcement of the
acquisition of Banco BGN in Brazil. The rise in costs (13.1
percent) reflected this expansive development strategy, said the

As a result of the newly launched operations, said the group,
operating income was “stable” (0.6 percent) at €156 million. In the
first half of 2007, Cetelem’s cost/income ratio moved up 1.3 points
at 57.4 percent. Return on equity was 33 percent compared to 38
percent in the first half of 2006. For the full year 2007,
operating income growth is expected to reach “high single

In July, Cetelem extended its presence in Brazil by acquiring 100
percent of Banco BGN, part of the Queiroz Galvão industrial group.
Banco BGN specialises in low-cost credit solutions for retirees,
pensioners and government employees. The move is a significant
investment for BNP Paribas in Brazil, a country in which the French
bank has been operating for 50 years. Cetelem has been in Brazil
since 1999, establishing partnerships with more than 70

In terms of revenues, Brazil ranks fourth for Cetelem after France,
Italy and Spain, with nearly 2 million customers.