Chances are the winner in the race for CEC (Romanian Savings Bank) will be selected by the end of this month. Greek NBG is the favourite contender, likely to bid more than Hungary's OTP, according to the latest market information.
The privatisation commission may set the new deadline for the filing of final improved bids for September 25 at the latest (from the initial August 31 deadline), as CEC's H1 financial results audit will have been concluded by this Friday, according to sources close to the process, quoted by Mediafax.
"KPMG will forward its audit by next Friday at the latest (September 8). After that, the final draft of the privatisation contract will be sent to the Government and after the document is endorsed by the Cabinet, it will be transmitted to the two contenders," explained the above-quoted sources.
The privatisation contract will most likely be discussed during the government session in the week of September 10-15.
According to the privatisation strategy, the two finalists, the National Bank of Greece and OTP Hungary, will have eight days after they get the last documents to submit their final improved bids.
On the other hand, recent research by Credit Suisse suggests NBG's final bid is likely to surpass OTP's.
"NBG said (...) that it would look to buy back excess capital should it fail to win the auction for CEC. This increases the likelihood that it will bid more than OTP," Hugo Swann of Credit Suisse was quoted as saying by the online financial journal "portfolio.hu".
These considerations come after, a week ago, OTP chairman Sandor Csanyi said he doubted CEC privatisation would be finalised during the following period. Csanyi told "porfolio.hu", "There is still significant difference between the real value of the bank and the price the Romanian government expects to receive."
The Greeks said at the beginning of CEC's privatisation that they would pay a "fair" price given that they are already present on the domestic market unlike other rivals that are likely to offer a premium in order to enter the Romanian banking system. Beside the two finalists, Raiffeisen submitted a final binding bid, but was not selected to participate in the final stage.
The last stage of the privatisation process includes only financial criteria, with the price being the exclusive element differentiating bidders.
Banking sources said that NBR reportedly offered over 500 million when submitting the final binding unimproved bid in July, while OTP bid less, though still above 450 million euros.
According to the published data, CEC in the first half of this year derived income worth 17.6 million RON (approximately 5 million euros), while its assets climbed by 7.1 percent to a little above 6 billion RON (1.68 billion euros).
CEC finals
CEC winner could be selected by the end of this month
Privatisation commission may set a new deadline for the filing in of final improved bids for September 25 at the latest
Audit of CEC's H1 financial figures, due to be finalised this Friday
The two finalists, NBG and OTP, have 8 days after they receive the last documents approved by the Govt. to submit final improved bids
Recent Credit Suisse research shows NBG's likely to outbid OTP's
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