Erste loses over 2bn euros following acquisition of BCR at current valuations

The listing of the BCR (Romanian Commercial Bank) on the Bucharest Stock Exchange could lead to a decline for Erste shares, according to analysts, this being one of the reasons why the Austrian group negotiated a postponement of the listing with the SIFs (Financial Investment Companies). The BCR’s market value fell almost three times since the bank was taken over by Austrian group Erste, in December 2005. The BCR could be put at around 2.21 billion euros at present, based on trading multiples of listed banks in the region, whilst the price paid by Erste in 2005 put it at 6.06 billion euros. Erste then paid 3.75 billion euros for the 61.88% majority stake, later boosting it to 69%, after it took over the stake of the BCR employees for around 400 million euros in the form of cash and of Erste shares. Erste’s overall investment thus amounts to over 4.1 billion euros, being the largest acquisition of the Austrian group. Currently, Erste’s stake in the BCR should be worth around 1.53 billion euros, which means a 2.5 billion-euro loss for the Austrians, which recovered a small part of the losses from dividends collected from the BCR in the last three years, amounting to 270 million euros.