The Savings Bank (CEC) is literally sitting on a pile of money, despite contrary opinions circulating on the financial-banking market and even in the Government, according to which the State should not expect to make a fortune from the privatisation of CEC.
Just like the pessimists were putting the value of BCR at 2-3 billion euros two or three months before its privatisation (a sum that was three times smaller than the reality, as the bank was eventually bought by Erste for 6 billion euros), the same thing is happening to CEC.
The value of the Romanian Savings Bank is currently put at 300 million euros, although an acceptable price should not go below one billion euros.
There are three factors that make CEC, Romania”s oldest lending institution, a very valuable bank: network, presence in the rural areas and brand-awareness.
First, its network comprising 1,404 agencies (of which 554 are located in cities and towns) is the largest banking network in Romania, with its real estate value standing at no less than 600 million euros, based on CEC data and a ZF assessment.
Thus, CEC owns 266 agencies with surface areas ranging between 1,500 and 5,000 square metres in county capitals, of which 65 in Bucharest. Considering an average price of some 800 euros/sqm for the agencies located in cities and an average surface area per agency of 2,500sqm, the average value of each agency is 2 million euros, resulting a total of 533 million euros.
For instance, one of CEC”s agencies in Vaslui (a city that is not as economically developed as Timisoara or Constanta), has been assessed at 500 euros/sqm, according to CEC officials.
But even a price of 800 euros/sqm can be deemed as low, since in Timisoara, Cluj and Constanta (not to mention Bucharest), the average price for an apartment in a building that is more than 20 years old revolves around 1,000 euros/sqm. “Of all the top 12 Romanian cities, there is only one where a bank has more branches or agencies than CEC, namely Cluj,” said Mihaela Pantea, CEC communications director.
Second, the bank”s roots in the rural area, where it holds 800 agencies that cover one third of Romania”s communes, give CEC a prime position given the country”s upcoming European integration. Romanian peasants will receive subsidies worth hundreds of millions of euros annually and the best distribution channels will be the networks that reach their homes, namely CEC and the Romanian Postal Company.
Moreover, as the banks are now targeting the cities” outskirts in their hunt for new customers, they will shortly turn their attention to the rural areas, which are home to 50% of Romania”s population.
Last but not least, no one can dispute CEC”s brand-awareness. Any foreign investor that will aggressively change working procedures and will spend money on a powerful IT system will get CEC back on its feet in one year, at most. sorin.pislaru@zf.ro