CEC pins hopes on euro decline

The total assets of Casa de Economii si Consemnatiuni (Romanian Savings Bank – CEC) amounted to 42,919bn ROL (1.06bn euros) at the end of Q1, exceeding the one billion-euro level below which they had gone at the end of last year.

CEC lost the third place in the banking system to Raiffeisen Bank at the end of 2003, as shown by the data released by the National Bank of Romania. CEC’s president, Constantin Teculescu says the NBR data “missed” 1,500bn ROL of the bank’s assets. “The figures we sent to the National Bank for the end of last year were preliminary data, and did not include the results of revaluations worth approximately 1,500bn ROL,” Teculescu says. CEC’s assets therefore totalled 40,492bn ROL in late 2003 instead of 39,173bn ROL as the bank’s preliminary financials showed.

CEC’s president says falling one place in the top bank ranking was due to the increase in the ROL/EUR rate, given that CEC’s assets are almost entirely ROL-denominated. “If a bank’s assets are denominated in foreign currency, they increase along with the exchange rate. If, however, the euro keeps going down, we will move up one place,” Teculescu believes. Raiffeisen Bank, which ranks third, has a great deal of its assets denominated in euros.

CEC made 287.4bn ROL (about 7 million euros) gross profit in Q1, three times higher compared with the same time last year. Its revenues for the January – March 2004 period amounted to 1,969bn ROL (48.5 million euros), up 17% from the corresponding period of 2003, when it had made 1,672bn ROL. It raised 36,642bn ROL (903 million euros) from individuals, 11.5% more than in Q1, 2003.

The bank is going through a restructuring process, which should be completed next year. Teculescu says the profit growth in Q1 was due to lower spending, to a cut in the number of loss-making bank offices and to an increase in the funds raised by the bank.
vlad.nicolaescu@zf.ro