Change of management for CEC (Savings Bank): the Finance Ministry, which represents the State as the sole shareholder of this savings bank is to propose Premier Tariceanu to have the current chairman Enache Jiru replaced with Eugen Radulescu, advisor of the NBR Governor, officials sources told Ziarul Financiar.
Besides the chairman, the entire executive management of CEC is targeted for replacement, including the members of the Board of Directors, who will be replaced by new state secretaries from the Finance Ministry.
Installed by the former PSD (Social Democrat Party) government, Enache Jiru, 40, is leaving his position with CEC after less than eight months at the helm and before the start of the privatisation procedures. He had previously been a state secretary with the Finance Ministry and the head of the Treasury.
The reasons offered for replacing Jiru? "He did not turn out to be that brilliant a banker," governmental sources say. At the same time, the sales of CEC offices are criticised, meaning that those buildings were in very good locations and too little money was collected from their respective sales. Furthermore, it is all those locations that make CEC the biggest banking network and they would be the most attractive thing about CEC for its privatisation.
The CEC management says that it was only about empty spaces, which had stopped being used once they had proven inefficient through the lack of clients. Why the lack of clients, that would open up another avenue for discussion, yet in the same context CEC maintains it made quite a lot of money from the sale of the respective buildings for more than the starting price. An example in this regard: an office in downtown Ramnicu Valcea was reportedly sold for 2,000 euros/sqm. The network adjustment would be nothing more than an efficiency boosting process by limiting fixed costs, which are not justified by the functioning of certain offices. CEC concluded 2004 with about 14.9 million euros in profit and 1.4bn euros in assets, which made it fourth leading bank in the system.
The chairman position is supposed to go to Eugen Radulescu, currently an advisor of the NBR Governor. Back in 2000 he was chairman of the Banca Agricola around the time when this bank was privatised at the hands of Raiffeisen Bank. This experience is considered as recommendation for the running of the same process in CEC's case.
The short list of Enache Jiru's successors included Doru Lionachescu, as well, a Bancpost vice-president, yet official sources say Radulescu was preferred. That was in spite of a possible conflict of interests, seeing as Radulescu is also a member of CEC's privatisation committee. He will undoubtedly have to give up that position first.
Replacing the management of CEC is not the only thing on the Finance Ministry's mind at this time. The Ministry insists that CEC should be privatised before BCR, that is in the exact opposite order than mentioned until now. Although this option has already been criticised by the representatives of the banks interested in both CEC and BCR, the Finance Ministry wants to sell it as soon as possible. Why is that? The fear that its position might deteriorate to risky levels because its assets are largely made up of placements with the NBR (over 80% of the total) and the interest rate collapse, not considered when devising the 2005 budget, is starting to affect its revenues.
razvan.voican@zf.ro
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