Polish Enterprise Fund IV is considering Romanian banks

Venture capital investment fund Polish Enterprise Fund IV, worth 300 million dollars, is considering several business propositions arising from the Romanian banking sector, being interested in the high potential of the financial market.

“Romania is an attractive market to us. We believe it has a high potential in the financial field, which is still little developed,” Iwona Drabot, PR Director with Enterprise Investors, told Ziarul Financial.

Polish Enterprise Fund IV could earmark about $40-60 million for investments in Romania this year, according to Jacek Siwicki, Enterprise Investors Managing Partner, who added that this money could either go to Romania or to other countries in the CEE region.

In his opinion, the sectors most likely to draw investments are banking, consumer finance, pharmaceuticals, retail commerce, food processing, telecommunications.

Rumours about the possible interest of Polish Enterprise Investors venture capitalist in two Romanian banks located outside Bucharest have spread lately.

“We have received and are considering several business proposals arising from different sectors of the economy including banking, but it is too early to discuss the details,” Jacek Siwicki told Ziarul Financiar.

A brief analysis shows that only five of forty-four banks operating in Romania are actually located outside Bucharest: Banca Transilvania, Cluj Napoca; Carpatica, Sibiu; Romexterra, Targu Mures; West Bank, Arad and Banca Romana de Scont, Brasov.

Three of the above, Carpatica, Romexterra and Banca Romana de Scont, would be out of the question, as their management and main stockholders had announced they were not planning on conducting talks to sell a stake.

On the other hand, according to authorised sources, West Bank, one of the targets, had announced early in the year it was in talks with two investor groups, for selling the controlling interests.

One of these groups is American-based. The bank officials say the principal shareholders are open to any kind of talks, because they are fully aware a small bank will find it harder and harder to withstand competition without sound financial backing.

The other possible candidate to part of Polish Enterprise Fund’s money is Banca Transilvania, one of the most wooed banks in the entire Romanian banking system.

Last year, prominent players such as Raiffeisenbank and EBRD showed interest in it, the latter even planning to buy up to 20% in Banca Transilvania. Furthermore, Banca Transilvania is constantly expanding its retailing policy.

At first, Polish Enterprise in Romania will work with Romanian-American Enterprise Fund (RAEF), as their roots are practically the same.

“We have a very good working relationship with Polish Enterprise,” Joel Hayes, RAEF vice-president, maintains.

At the moment, RAEF has investments in Banca Romaneasca, where it holds over 60% of shares.