War is set to break out between Erste Bank and Raiffeisen Bank for the takeover of Casa de Economii si Consemnatiuni (CEC), the Romanian Savings Bank. Two of Austria's top banks, with strong networks in the region, are now expressing clearly their keen interest in the largest network of banking offices in Romania, which is valued at 300-400 million euros.
"Erste Bank has a strong and very serious interest in entering the Romanian market, and we want to participate in CEC's privatisation. We've already started looking for promising young bankers to help them become familiar with the "Erste world" through a job rotation programme in Austria and Central European subsidiaries," Hana Cygonkova, Erste Bank's spokesperson for Central Europe, told Ziarul Financiar.
The management of the Austrian bank believes that "CEC fits very well with Erste Bank's structure."
"Raiffeisen is ready to fight Erste Bank over CEC, and the expertise we acquired in streamlining Banca Agricola will help us in this," stated Herbert Stepic, Raiffeisen Zentral Bank (RZB) vice-president and president of Raiffeisen International, the entity that controls the group's subsidiaries in the region.
Representatives of both banks are eagerly awaiting official selection of the consultant who will prepare CEC for privatisation on behalf of the Romanian State. However, The Finance Ministry, the representative of the State as CEC's sole owner, did not receive yesterday the so-called 'no-objection' from the World Bank to the appointment of JP Morgan as winner of the bid for the position of consultant in one of the last major banking privatisations in the region.
Official sources say Herbert Stepic plans to discuss the CEC privatisation issue with Finance Minister Mihai Tanasescu during the autumn meeting of the IMF and World Bank members in Washington.
Even Raiffeisen Centrobank analysts say Erste Bank is "obviously" willing to pay "a very competitive" price for the largest network of branches in the entire Romania.
"We're expecting a keen interest in this privatisation, since many banks, like OTP, Bank Austria, UniCredit, KBC or Intesa, are still under-represented in this high-potential market," a Raiffeisen analysis said.
Erste Bank's strategy takes into account that on entering the market, whether by taking over CEC or otherwise, it will have well-trained local human resources, accustomed to the style and working procedures of an 185 year-old institution.
Erste Bank is the oldest savings bank in Austria ('erste' means 'first' in German) and has retained its retail banking status, providing dedicated banking services to individual customers and small and medium-sized enterprises. As such, Erste Bank regards itself as a "bank for the middle classes."
"We have achieved real turnarounds in all the banks we have bought in countries neighbouring Austria. Our biggest acquisitions, Ceska Sporitelna, with 5.5 million customers, and Slovenska Sporitelna, with 2.5 million customers, are now the strongest banks in their respective markets, after having experienced big problems," says Hana Cygonkova.
razvan.voican@zf.ro
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