The Austrians at Raiffeisen are out of the race for the privatisation of CEC (Savings Bank). They bid less than the Greeks at NBG and the Hungarians at OTP, who will be battling in the finals to take over the fifth-largest Romanian bank.

"After analysing the bids and assigning a score according to the agreed scale, only two banks are left in the competition. The finalists are, in alphabetical order, the National Bank of Greece and OTP Bank," Sebastian Vladescu, Finance Minister and head of CEC's privatisation committee announced yesterday.

Although he declined comment on the value of the two bids, Vladescu said, "since we're going ahead with the privatisation process, the bids must be within acceptable limits.
 
" Vladescu seemed pleased with the financial bids submitted by the two final banks. The Finance Minister explained Raiffeisen did not qualify because the score its bid got was at least 10% lower than the last (qualifying) bid. Mediafax news agency quoted sources close to the privatising process that say only one of the two bids that made it into the finals exceeded 500 million euros. A 500 million-euro bid evaluates the bank at 715 million euros.

The state is selling 69.9% in CEC as part of the bank's privatisation process, a stake that includes the 9.9% of the Property Fund, for which this fund will get the cash equivalent once the money from the privatisation is collected. In a move that is unrelated to the competition involving only NBG and OTP now, the state will sell 5% in CEC to the bank's employees and to all those retired employees whose last place of employment was with this lender.

"OTP Bank submitted a fair and realistic bid for the acquisition of the 69.9% in CEC," stated Laszlo Wolf, deputy chief executive of OTP, the largest Hungarian bank. Wolf says the Hungarian bank's management welcomes the announcement about making it into the final stage of the privatisation. The National Bank of Greece, the other finalist, had not provided any comment by the time the story was ready for print.

The two finalists will begin talks for the final version of the privatisation contract on Tuesday, August 1. The talks should be finalised on August 23 and the improved financial bids submitted on August 31 will decide CEC's winner. The announcement about who takes over the CEC will be made at the end of next month, if the proposed schedule is kept, Vladescu specified. "Our long-term development goals will be attained by organic growth; CEC was an interesting opportunity for us, but we have other options, as well," Steven van Groningen, chairman of Raiffeisen Bank Romania says. He added the Austrian bank has opportunities to grow faster than the market average in Romania and that Raiffeisen Bank would continue to be a first rate player on the market even without buying CEC.

The bids were opened on the first floor of the Finance Ministry yesterday at 12 p.m. Only the 11 members of the privatisation committee were allowed into the room, along with two representatives from each of the bidders.

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