CEC to sell soon, OTP may bid Tuesday March 22, 2005 By Matthew Higginson http://www.bbj.hu/?module=displaystory&story_id=246021&format=html
The Romanian state plans to put the smaller savings bank CEC SA on sale earlier than the nation's largest lender, Banca Comerciala Rom�na SA (BCR), Finance Minister Ionut Popescu said last week. Romania plans to sell both banks this year, and Hungary's OTP Bank Rt is expected to be one of the interested parties. Popescu made the comments in an interview with newswire Bloomberg, and said he will meet in April with U.S. investment bank JP Morgan Chase & Co., the firm selected to advise the Romanian government on the sales. "We want to sell CEC first because there are more potential buyers for it and we want to take advantage of this," Popescu said, without outlining any timetable. CEC and BCR are two of the largest banks still in state hands in Eastern Europe. BCR, the larger of the two, has more than one-third of Romania's banking market. Among foreign banks that have expressed interest in buying Bucharest-based CEC are Bank Austria Creditanstalt AG, Erste Bank der Oesterreichischen Sparkassen AG and Raiffeisen Zentralbank Oesterreich AG, Austria's three biggest lenders, and Rabobank Nederland NV, the third-largest Dutch bank. OTP, Hungary's dominant bank, has expressed interest in the privatization of CEC, saying it is always interested in looking at banks for sale in the region. Last year, OTP bought a small privately owned bank in Romania, RoBank SA, for $47.5 million. The year before, OTP purchased Bulgaria's leading bank, DSK Bank EAD, for ?311 million. Korn�l Sarkadi Szab�, an equity analyst covering OTP for Raiffeisen Bank Rt, agreed that OTP could be a bidder for CEC, but said Romanian banks are looking increasingly overvalued. "[OTP's CEO S�ndor] Cs�nyi has already warned that banks in Romania appreciated markedly in the past 12 months in terms of price per earnings and share price to book value," he cautioned. He said this could lead to OTP's interest cooling. He said OTP's appraisal of potential acquisition targets in the region has become more cautious. The two sales will effectively place the Romanian banking sector under the control of Western banks. Soci�t� G�n�rale SA of France owns the country's second-largest bank, Banca Rom�na Pentru Dezvoltare SA, and competes for market share with banks such as Austria's Raiffeisen, which bought out Banca Agricola SA and rebranded it as Raiffeisen Romania. Dutch banks ABN Amro Holding NV and ING Groep NV have set up Romanian subsidiaries. Romania's retail-banking sector is steadily gaining momentum. Revenues are expected to grow in line with the economy, which expanded by about 8% last year. Finance Minister Popescu said Deutsche Bank AG, Europe's third-largest lender, has reiterated its interest in buying BCR, although it has yet to publicly comment. To date, only the HVB Group, Germany's No. 2 bank, and Italy's UniCredito Italiano SpA have expressed interest in buying a majority of BCR. A large foreign bank would have to buy stakes in BCR from the Romanian government, the European Bank for Reconstruction and Development and the World Bank's International Finance Corporation. The Romanian state currently owns 37% of BCR, after the EBRD and the IFC last June completed the payment of $222 million for a 12.5% stake plus one share each in BCR. Five Romanian investment funds each hold 6% stakes, while bank employees collectively own 8%. ------------------------ Yahoo! Groups Sponsor --------------------~--> Give underprivileged students the materials they need to learn. Bring education to life by funding a specific classroom project. http://us.click.yahoo.com/FHLuJD/_WnJAA/cUmLAA/RR.olB/TM --------------------------------------------------------------------~-> EuroAtlantic Club: http://www.europe.org.ro/euroatlantic_club/ Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/romania_eu_list/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
