Bank Austria Creditanstalt (BA/CA) Romania chairman Dan Pascariu believes that HypoVereinsbank taking over Bank Austria will have a positive impact on the Austrian bank's business in Romania and will even lead to its development.
"This is a positive signal as the merger will place us, as a group, on the third place in Europe and on a leading position in Central and Eastern Europe. Moreover, given HypoVereinsbank's vocation for retail operations, the business in Romania will have the opportunity to make new acquisitions, but everything depends on the political and economic evolution of our country," Dan Pascariu told Ziarul Financiar. HypoVereinsbank is the second-largest bank of Germany.
Pascariu added that, following this merger, BA/CA Romania would represent the German banking sector on the Romanian market, as it was almost absent after BNP-Dresdner Bank announced its leaving Romania.
"One of the reasons why Bank Austria was taken over was its territorial network in the Central and Eastern European region, which clearly proves an intention to expand the retail sector. Another advantage for us is the fact that Bank Austria will remain an independent entity by coordinating the activity of the entire newly-created group both in Austria and in Central and Eastern Europe," BA/CA Romania official explained.
As to the investment plans for the period to come, Pascariu thinks that it is still early to present a new strategy, but he added that BA/CA Romania would continue the investment plan established for the current year. "Until the end of the year, we intend to open a subsidiary in Timisoara," the bank's chairman says.
BA/CA Romania became operational in the autumn of 1998 and currently has two subsidiaries in Bucharest. At the end of last week, HypoVereinsbank announced that it wanted to take over the largest bank in Austria for 7.3 billion dollars.
According to an announcement made yesterday in Frankfurt, HypoVereinsbank is planning to downsize Bank Austria's staff in the retailing sector by 10% until 2001. Moreover, it intends to close no less than 20% of the Austrian bank's subsidiaries over the next three years. The German bank hopes that this restructuring programme will bring it 500 million euros in yearly savings on the estimated costs.
HypoVereinsbank's shareholders are concerned about the bank's increased exposure to Eastern European companies, deemed as unstable. Therefore, sales of the German bank's shares yesterday posted a more than six-percent fall in their market price.
The market rapidly shifted to Bank Austria shares in order to benefit from the 34% bonus offered by HypoVereinsbank upon purchase. The German bank decided to launch an issue of 114 million new shares, which are to be offered in exchange for Bank Austria shares at a one-to-one ratio. According to the bank's officials, merging costs will come to 350 million euros.
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