Coup de theatre: BCR to be privatised starting next month

Finance Minister Mihai Tanasescu yesterday announced that the privatisation of Banca Comerciala Romana (Romanian Commercial Bank- BCR) will start next month, surprising all the investors attending the conference organised by British magazine “The Economist” in Bucharest.

At the same time, Tanasescu claimed that another two state-run financial institutions – CEC (Romanian Savings Bank) and Eximbank – will most certainly be privatised within two years’ time.

“BCR’s privatisation process will begin next month and we expect this process to be concluded by the end of 2002,” Finance minister Mihai Tanasescu said. The press was not allowed at the discussions of this forum.

When inquired after the questions and answers session with the investors in Romania, the Finance minister specified BCR would be privatised, indeed, as it “will fall under the PSAL II programme.” Negotiations with the World Bank for this programme are due to start on May 21.

The Finance minister also said that Eximbank and CEC would undergo restructuring in order to be ready for privatisation.

Tanasescu’s announcement came as a surprise, as the new commission set up for the privatisation of BCR and appointed by the Nastase-led Cabinet has started work for just one month now.

A commission member told Ziarul Financiar that the panel had convened only twice and deadlines for the beginning of the privatisation process had not even been discussed. “We have just finished setting papers from the old commission straight,” the quoted source said.

The Privatisation Authority, BCR’s main shareholder, did not care to make any comment.

BCR is the largest bank in Romania, holding 30% of the market. Romanian authorities have not made up their mind about which option to choose for the privatisation, as they feel it is to the national interest that the State should keep holding the controlling interests in the bank.

The most probable choice is selling small stakes to financial investors rather than strategic ones. To this might add a possible sale of shares on the capital market.

BCR last year registered $114 million in net profit and $38 million in Q1, this year. Analysts feel the real value of the bank exceeds one billion dollars, considering its position on the Romanian market, and furthermore, the fact that it still remains one of the last large banks in the region which have not been privatised yet, which is sure to arouse a lot of interest.