ING sees CEC as retail bank

ING Barings, which was appointed last year to counsel the Savings Bank (CEC) on restructuring and privatisation, at the end of the project’s first stage has recommended that CEC should maintain its retail banking activities with services aimed at both the population and the Small and Medium-sized Enterprises, with domestic and hard currency denominated loans. The project’s second step is due to end on August 31, 2001 and will comprise implementation of feasibility study conclusions.

“At the end of the first stage, the conclusion is quite obvious, recommending CEC to work as a retail bank. Moreover, activity should focus on the development of new services and products.

There were some recommendations on crediting and some restrictions specifying that CEC should largely loan to SMEs and not corporations,” CEC President Ion Ghica told Ziarul Financiar.

Ghica added that this CEC status change was included in the proposal to change CEC operational statute, which had been submitted to the National Bank of Romania (NBR).

These two important changes aim to make CEC compliant with the Banking Law 98/1998, and, on the other hand, to clearly set CEC scope as a retail bank also addressing to SMEs.

“We hope we will soon get NBR’s answer,” Ghica said. As CEC was involved in the scandal of the National Fund of Investments (FNI) collapse, authorities are planning to restrict CEC operations in order to avoid other risky transactions.

As for CEC request to perform operations with hard currency, CEC officials say the institution has the logistics and the functioning norms, but this new product cannot be implemented yet.

“We cannot offer our clients hard currency denominated products, as NBR has allowed us only to attract deposits and not to perform operations with foreign currency on the foreign exchange market, so we cannot keep hard currency in our vaults,” the institution’s president has recently said.