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Romanian CEC Deferred Sale Seen Positive -PM

The deferred sale of Romania’s last remaining state-owned savings bank Casa de Economii si Consemnatiuni, or CEC, was not a failure as it would only have favored a profit-driven investor, failing to meet clients’ requirements for customized services, Premier Calin Popescu Tariceanu said Tuesday.
Romanian CEC Deferred Sale Seen Positive -PM
06 mai 2008, 12:34, English

"The deferred CEC sale was not a failure but a new challenge," Tariceanu said.

Tariceanu said in March the Government would approach CEC sale from another angle, encouraging the participation in the sale process of companies with Romanian share capital, not just only of the foreign ones.

CEC has a wide network in the rural area, which is an asset in competing with other banks, Tariceanu added.

In December 2006, the government canceled its planned privatization of CEC because of a lower-than-expected offer from the final bidder, the National Bank of Greece (ETE.AT).

Late May 2007, Vosganian said CEC would not be privatized in the near future, as the government would focus instead on restructuring the bank before trying to sell it again. Such a move, he added, does not represent reluctance towards privatization, as Romania has already privatized 90% of its banking sector.

CEC President Radu Ghetea also said late May that privatization would not take place sooner than 2009, when the first restructuring stage of the bank ends.

A decision to resume privatization procedures and build the sale strategy will be made after 2011, longer than previously announced, to regain its high ground on the domestic market, an Economy and Finance Ministry report said early July 2007.

The Economy and Finance Ministry together with CEC’s management aim to keep to a minimum any negative effects of the restructuring process of the bank and plan to increase its efficiency.

The Romanian government hiked CEC’s share capital by RON500 million to RON649.7 million at the end of December 2006. Following the hike – the first since the collapse of the communist regime in Romania in 1989, the bank ranked bank ninth on the market by assets.

The bank posted assets of RON10.86 billion end 2007.

CEC changed its name to CEC Bank as of Tuesday, part of the bank reorganization process.

CEC facelift is very important for a bank striving to meet the needs of low-income persons in the rural environment and small towns.

CEC, known as "the people’s bank" under the communist regime, has 1,400 branches, including in remote rural locations, forming the country’s biggest bank network.