The sale of the stake in Casa de Economii si Consemnatiuni (CEC) will be done only for a significant amount of money, with the Romanian authorities reserving the right to reject all bids, if the price is not satisfactory, Finance Minister Sebastian Vladescu stated yesterday.
"We have officially announced that if the amount offered is not satisfactory, we will not sell CEC," Vladescu said.
Last week ZIAURUL FINANCIAR wrote an article saying that CEC''s (Romanian Savings Bank) value should be in excess of one billion euros.
Sebastian Vladescu believes it is only natural for the authorities to expect a higher price for a bank with CEC''s reputation, one of the oldest banking institutions in Romania.
The Public Finance Ministry is the sole shareholder of CEC. The list of pre-selected contenders for CEC includes six banks: National Bank of Greece, Monte dei Paschi di Siena, Dexia Bank, EFG Eurobank, OTP Bank and Raiffeisen. The investors interested also included the Austrian owned Erste Bank, which won the bidding race for Banca Comerciala Romana, concluding the privatisation of the bank in a deal worth 3.75 billion euros.
The final binding bids for CEC will be submitted until April 25. The Government has recently modified CEC''s privatisation strategy, and the investors interested in privatisation will submit bids to buy 85% in the bank, compared with the 75% previously. At the same time, the privatisation committee decided the price to account for 75% of the score scale used to evaluate bids.
Steven Van Groningen, chairman of Raiffeisen Bank Romania, has recently stated that the rumoured one billion euro asking price for the controlling interests in CEC is high, if this bank is intended to remain one for the entire population, especially in the rural areas. However, as said in ZIARUL FINANCIAR''s article last week, CEC is literally sitting on a pile of money, despite contrary opinions circulating on the financial-banking market and even in the Government, according to which the state should not expect to make a fortune from the privatisation of CEC. Just like the pessimists were putting the value of BCR at 2-3 billion euros two or three months before its privatisation (a sum that was three times smaller than the actuality, as the bank was eventually evaluated by Erste at 6 billion euros), the same thing is happening to CEC.
The value of the CEC is currently estimated at 300 million euros, although an acceptable price should not go below one billion euros.
There are three factors that make CEC, Romania''s oldest lending institution, a very valuable bank: network, presence in the rural areas and brand-awareness.
CEC has a network comprising 1,404 agencies (of which 554 are located in cities and towns) and is the largest banking network in Romania, with its real estate value standing at no less than 600 million euros, based on CEC data and a ZF assessment.
Thus, CEC owns 266 agencies with surface areas ranging between 1,500 and 5,000 square metres in county capitals, and 65 in Bucharest. Considering an average price of some 800 euros/sqm for the agencies located in cities and an average surface area per agency of 2,500 sqm, the average value of each agency is 2 million euros, resulting in a total of 533m euros.
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