DATE: Oct, 18th, 2013

CASE: ALPEN BANK

CLASS: MBA586

GROUP C:
CHIAWEN ‘TRACY’ CHANG
CHIENYU ‘SHAWN’ HSIAO
DANIEL GUTIERREZ
NING ‘NINA’ BAI
WENSHAN ‘NESSA’ XU

Intro: Having 15 branches in Romania, Alpen Bank, a premium banking service provider is trying to expand its business in Romania and launch its credit card system. Considering the low per-capita income level and low acceptance of credit cards in Romania, we evaluated the profitability of this plan carefully and suggest Alpen Bank to enter the Romanian credit card market and explore the middle class in long run. PEST Analysis: Political • Capital market in Romania is more stable through annex to the European Union and implementation of directives. • The European Legislation to protect investors, safeguard market integrity by establishing harmonized requirements governing the activities of authorized intermediaries and to promote fair, transparent, efficient and integrated financial markets. • Substantial ascending evolution of Romanian capital market since 2004 helped by the government opening it for competition. • No limit of foreign participation in commercial companies (up to 100% ownership in Romania), full repatriation of capital and profit, equal treatment of foreign and domestic investors. Economic • Macroeconomic indicators (GDP, inflation rate, unemployment rate, etc.) registered in the past have not reached a stable point comparing it with other E.U. countries (with a big difference). The process of leveling with them could potentially take a long period of time. • Dependence on foreign capital is growing. • Growing interest rate for credits. Depreciation of local currency directly affects budget of companies and households because debt is dominated by foreign currency. • Last year the main stock