Government asks investors to keep CEC as a separate bank

The winner of the competition to take over the controlling interests in CEC, either National Bank of Greece or OTP, will not be allowed to merge its local branch with the former savings bank, according to the Government decision about the final version of the privatisation contract, sources revealed to Mediafax. NBG operates Banca Romaneasca, whose market share stood at 2.1% at the end of September, while OTP owns the 16th bank in the system, with 1.3% of the total banking assets. “The decision is explained by CEC being intended to remain a separate entity and develop as such. On the other hand, a formula was needed so as to allow the state to keep its 25% interest without having to come up with capital contributions unless a capital increase in cash is performed,” the quoted sources said. At any rate, it is hard to believe that an investor would try to fundamentally change CEC’s line of business, considering the bank, including its territorial network, targets low-income customers mainly, who are not interested in more expensive services like those provided by Banca Romaneasca or OTP Bank Romania. In the two previous similar cases, BRD bought the local branch of Societe Generale and Raiffeisen Romania merged with Banca Agricola. Once this issue has been clarified, the deadline for submitting improved bids could be set for somewhere between November 25 and November 30, a source close to the deal was quoted as saying by Reuters.