With electoral noise in full swing, few were surprised when the privatisation of Banca Agricola was put off for another month, because the State Ownership Fund and the Finance Ministry failed to collect all the data required by investors.
Pressed by the World Bank to sell its remaining 56% in the bank, the Government promised, in the Official Gazette, to do so by June 30, 2000. Then followed a deferral, until August 8, when negotiations failed.
Apparently, the potential investor is asking for a detailed credit portfolio, the bank’s participation in various investment companies and funds, the exact evaluation of realty assets, and, more importantly, when and how much the state will inject into the bank to cover the losses, which only in 1999 were around $200 million.
What can the Romanian state do now? Its managing talent brought the bank to the verge of tacit bankruptcy, with all the budget support – almost $1 billion since 1990. So the state has to get rid of it! But how?
To liquidate it would mean the immediate payment of several hundred million dollars to foreign banks under deals guaranteed by the state itself, and the coverage of popular deposits, 3 trillion lei in all, from the Deposits Guarantee Fund, which is already in the red after Bankcoop and BIR.
To sell the bank, the state needs to inject capital, otherwise no one will buy it.
But which variant is the cheaper? Have these costs been estimated? So far, the bank’s crisis management, appointed by NBR in October last year, did not provide a clear answer to the question, although the privatisation decision has been made.
After all, why should the state cover losses that are not its own, especially that the bank has been left with just over half of its share capital? Why should the budget support private companies’ losses? Shouldn’t those who caused the losses do it?
But those who cause them are of the same lot as those who must decide what is to be done. The mix of criss-crossing top-level interests keeps things misty, as it happened with Bancorex. The average man only learns, from time to time, that the state must pay a few more trillion lei as debt, and that the state had no choice, it had to save the bank.
As a result, the situation of state negotiators in the affair is more than unfortunate. They have their backs against the wall. The only bidder, the US-Greek consortium, has every card to dictate its preferences.
And, besides a name with an echo of seriousness in customers’ minds and a widespread network of branches and agencies, covering even the smaller towns and villages, Banca Agricola has precious little to sell itself.
So the situation is almost hopeless.
It this the road taken by any state bank? Is it that devaluation cannot be stopped if management remains unaccountable? The Dacia Felix, Credit Bank, Albina, Bankcoop, BIR or FNI experiences speak otherwise, but only apparently. In reality, state institutions stood to suffer again. CEC, SOF, other state banks, including even Banca Agricola, had hundreds of billions in private placements in banks which later went bankrupt.
The endless dawdling in the privatisation of Banca Agricola cannot help anything. Even if negotiated with the back against the wall. No one can guarantee that the situation will not actually worsen, that the state will end up having even more to cover, and the squeeze becomes even harder.