CEC”s privatisation is no longer an emergency for the Government, as the preliminary bids have been deemed as too low.
Banking sources say a current of opinion is now gaining ground that says it would not hurt the state if it retained a significant stake in the banking system, as was the case on other markets in Central Europe.
“Having seen the indicative bids, I am not really satisfied. I cannot tell you today what is best for CEC. The Committee is currently analysing the best option for CEC,” Finance Minister Sebastian Vladescu, head of CEC”s privatisation committee, stated.
He states January is no longer a firm goal for the submission of the final binding bids for CEC.
The quoted banking sources add that the authorities have not decided whether to go ahead and complete the privatisation process or not and are wondering if it would not be best to feed some money into the bank to consolidate its position that has weakened over the last two years.
According to the document requesting bids for privatisation, sent to the interested investors, the Ministry of Public Finance in its position as representative of the state, the sole shareholder of CEC, reserves the right to halt the privatisation process any time it sees fit.
The seven bidders in the race for CEC (Romanian Savings Bank) had initially been invited to submit binding bids by November 28, 2005.
The deadline however, was extended indefinitely, while waiting for the BCR (Romanian Commercial Bank) to be privatised. Erste Bank, the winner of the largest bank on the market for 3.75bn euros, was also on the list of potential investors for CEC, along with the National Bank of Greece, Monte dei Paschi di Siena, Dexia Bank, EFG Eurobank, OTP Bank and Raiffeisen.
After the preliminary bids were submitted on October 21, banking sources on the market said they did not exceed 300 million euros, despite evaluations of some 650 million euros on the market.
CEC”s assets amount to some 1.43bn euros, which accounts for about 5% of the banking system. It has the largest territorial network with more than 1,400 branches, and made some 870,000-euro profit at the end of September 2005, after a first half of losses. The bank is undergoing restructuring and is developing products and services. It needs modernisation to make its operations profitable. At the same time, it can be an important basis for growth, particularly because of its extensive network of branches in the rural and small town areas, untapped by other banks.
The privatisation was supposed to be sped up this month, according to previous statements by the Finance Minister, but Vladescu changed his mind in the meantime. Now that BCR has been privatised, the state controls only CEC and Eximbank. This is not an unprecedented situation in Central and Eastern Europe, as there are other countries that did not privatise their banking systems in full. In Poland, the state continues to retain more than 51% in the largest bank on the market, PKO Bank Polski, which accounts for over 20% of the banking system assets, despite having cut its stake by a public offering of 37.7% on the stock exchange in Warsaw in November 2004.
razvan.voican@zf.ro ; ioana.ursu@businessmagazin.ro