ECONOMY

NBG, Eurobank to express their interest in Romania’s CEC bank

BUCHAREST (Reuters) – Romania expects to get strong foreign interest in the sale of its fourth-largest bank Casa de Economii si Consemnatiuni (CEC), with around 10 banks expected to submit letters of intent ahead of today’s deadline. The sale of a majority stake in state-owned CEC, which has almost half of all bank branches in the Balkan country, to a foreign bank is part of Romania’s banking privatization as promised to international lenders. A deadline for lodging letters of intent expires at 5 p.m. today. «We expect strong foreign interest in CEC. So far, none of the would-be bidders have sent letters of intent, but we expect at least 10 international banks to show up tomorrow,» a senior Finance Ministry official told Reuters. Under the sale strategy, internationally reputable banking institutions can bid for a stake between 50 percent plus one share and 75 percent in CEC, which is wholly state-owned. Greek financial daily Kerdos said yesterday that National Bank of Greece and EFG Eurobank are expected to confirm their interest today. A spokesman for Dutch Rabobank said a letter of intent would be provided by today and Romanian media said that France’s Societe Generale was also interested. «Societe Generale will submit a letter of intent for CEC,» Patrick Gelin, the president of Romania’s commercial bank BRD-SocGen, which is majority-owned by Societe Generale, told financial newspaper Ziarul Financiar. Other interested parties include Austrian banks Erste Bank and Raiffeisen International, Hungary’s OTP and French-Belgian bank Dexia. Local media speculate that Bank Austria Creditanstalt might bid, though an anonymous company source told Reuters earlier this month that it was no longer interested. Analysts have said the sale might fetch as much as 530 million euros, and the high number of potential bidders indicates the race will be tough among banks eager to gain a foothold in the ex-communist country’s booming economy. «It’s the last chance for foreign players to get a dominant position in the Romanian banking system, which explains the strong interest in CEC,» said independent analyst Florin Petria. «It’ll be a tight race, but eventually beneficial for CEC.» Eager to restructure its economy ahead of European Union entry as early as 2007, Romania has pledged to privatize CEC, the people’s bank under communism and still the strongest banking presence in the countryside, by the end of this year. This is the last state-controlled bank to be privatized. CEC has a share capital of 149.7 million lei (41.2 million euros), 1,407 branches across the country of 22 million people, 2 million customers and 9,000 employees. Its total assets were about 1.3 billion euros in 2004.