The National Bank of Greece, one of the most powerful Greek financial groups, says it will organically develop its business on the Romanian market, where it already owns Banca Romaneasca, through massive investments, if it does not emerge as victor in the competition for the acquisition of Casa de Economii si Consemnatiuni (Romanian Savings Bank – CEC).
The Greeks say they are “determined” about buying CEC, but will not pay too high a price, a stance similarly adopted in the competition for Banca Comerciala Romana. NBG was a contender in the race for BCR but did not come out as one of the top two competitors when the final bids were submitted. If they do not win CEC either, the NBG officials say a substantial increase of Banca Romaneasca capital will follow, to sustain fast-paced growth.
“We are now considering a capital increase for Banca Romaneasca, a much more important one than the increase performed at the beginning of the year. This also depends on what happens in the race for the acquisition of CEC,” Yannis Pehlivanidis, the NBG vice-president stated. Pehlivanidis is also the chairman of the board of Banca Romaneasca. The increase will be operated before the beginning of next year and will allow the bank to resume lending in foreign currency.
He says the resources will help the organic development of this local branch of the group. Early this year the Greek bank contributed 28 million euros to the capital of Banca Romaneasca. Meanwhile, the bank doubled its assets to more than 500 million euros.
Pehlivanidis says the price for Banca Comerciala Romana was driven up by the ambition of some groups to enter the Romanian market, who were willing to pay more. The NBG did not feel this urge, which was reflected in their final bid.
As shown in its 2005-2008 plan, the NBG set out to significantly improve its presence on the Central and Eastern European markets, where it sees substantial growth potential. To that end, it restructured its business, dropping some branches in the United States of America and in Canada, in order to fund its CEE investments.
“It is very important for us to hold a significant position in Romania. It will be a very aggressive development, considering the market conditions. We cannot provide any concrete data yet, because we haven”t finished our plans,” stated Agis Leopoulos, general manager of the “International Activities” division of the group.