16. 09. 11. - 08:42

Erste Bank ups BCR stake

Erste Group Bank AG (Erste Bank) has increased its interest in Banca Comerciala Romana (BCR).

The Viennese institute – one of the biggest investors in Eastern Europe (EE) – announced yesterday (Weds) it upped its stake in the Romanian bank by 24.12 per cent. Erste Bank acquired the shares from local investment funds for 435 million Euros. The deal means Erste Bank holds 93.52 per cent in BCR.

Erste Bank acquired BCR in 2006. The bank is, according to a report by the Romanian Times online newspaper, the sixth-strongest brand of the EE country.

Erste Bank performed well in both European stress tests on the performance of the continent’s financial institutes in the case of another recession. The bank managed to increase its net profit by 5.2 per cent from the first half of 2010 to the same period of 2011 to 496.3 million Euros.

Erste Bank explained its performance was affected by new bank taxes in Austria and Hungary which cost it 68 million and 27 million Euros respectively. Erste Bank’s Hungarian affiliate made a loss of 51.3 million Euros between January and June of this year. BCR was in the red by 2.2 million Euros.

Erste Bank and three other Austrian finance institutes received financial support from the state during the economic crisis. Erste Bank CEO Andreas Treichl said in May his firm wanted to pay back the 1.22 billion Euros in the first half of this year before a spokesman for the bank explained the transaction would not occur in this time span due to ongoing talks about conditions with the federal finance ministry headed by People’s Party (ÖVP) official Maria Fekter. Her party cooperates with the Social Democrats (SPÖ) on federal level.

Erste Bank CEO Andreas Treichl caused a stir in May when he labelled Austria’s political leaders as "stupid and cowardly." The banker criticised criteria of the planned Basel III decree which will force European banks to increase their equity ratios.

He attacked decision-makers for being ready to give the green light to the regulations while banks faced no tougher restrictions considering high-risk speculative deals. "The next crisis will come and it will be worse than the current one," he warned before apologising for his "choice of words."

"It seems a bit of emotion is needed to start a debate about something in Austria," he claimed, adding that he would not change his opinion considering Basel III.