CEC has managed to recoup the losses it made in the first half of the year, posting 3 million RON (around 870,000 euros) in net profits at the end of September, the bank''s chairman, Eugen Radulescu, announced.
CEC made 66 million RON in net profits in the first nine months of 2004, but that was before the collapse of the interest paid by the NBR and the Finance Ministry for the placements attracted.
CEC, the banking institution with the weakest computer infrastructure on the market, is announcing its financial results less than three weeks from the end of the third quarter. The results are obviously not audited.
Radulescu explained that it was possible to offset the 2.7 million euro losses on May 31, 2005, thanks to a spectacular increase in the volume of RON loans, which are growing by at least 50 million euros every month.
The data released yesterday thus show that the volume of loans granted by CEC up until the end of September exceeded 1.5bn RON (around 428 million euros) and should overshoot two billion euros by December 31.
Despite the growth in lending, CEC continued to lose market share in the first six months of the year, ending with 5% and in fifth position with assets of 1.46bn euros.
The bank''s chairman says making profit is not CEC''s main goal.
This would explain why the interest rates on deposits are kept at some 7% a year, while BCR and BCR have brought them down to 5%.
Radulescu says the bank''s average spread between active and passive interest rates of around 3.5% is sufficient, given that other banks operate with spreads upwards of 10%. "We can cope well and even make profit in the long run because we are relying on an increase in business volume and our continuing to streamline our operations and therefore cut costs," he said.
This streamlining has included staff cutbacks, in which the number of employees has fallen by nearly 1,500 since March. The bank is offering severance packages to the people made redundant worth 10 average CEC salaries. The total amount earmarked for such payments is 90bn ROL.
The bank''s 1,400-strong branch network remains frozen as it is: under the terms of the privatisation contract, the buyer must keep at least 700 of the 900 branches in towns with fewer than 50,000 inhabitants - that is, in those places where BCR is the only other bank opening occasional offices. razvan.voican@zf.ro
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