FROM THE SHAREHOLDERS OF ERSTE: "BCR could turn into a bottomless pit"

The General Meeting of the shareholders of Erste Bank, which was held last week in Vienna, was tense and lasted about twelve hours, according to stock market sources, who claim that the founding members of Erste protested, demanding the honoring of their right - established through the bylaws of the company - to receive 8% of the capital that they have invested, regardless of the evolution of the bank.

"The founders have expressed their discontent that Erste suffered losses particularly due to the depreciation of its holdings in other countries", the sources said, who also added: "The shareholders have also accused the management that it has failed in growing the bank following the American model".

It would seem that the shareholders said that BCR was a good investment, but at an extremely high price; moreover, that the current management did not pay enough attention to keep it operating at its previous standards.

In the first year after the privatization, the profit of BCR accounted for over 60% of the profit of Erste, and now BCR is posting losses.

According to the website "format.at", during the talks at the General Shareholder Meeting, Rupert Heinrich Staller, minority shareholder of Erste, said that BCR could turn into a bottomless pit.

Prior to the financial crisis of 2006, Erste was a market leader in Romania, having gathered about 3.75 billion Euros, but since then, BCR had to be recapitalized several times, according to the website "Diepresse".

At the general shareholder meeting, BCR was valued at about 1.1 billion Euros, but with a market value of just 300 million.

In the first quarter of this year, BCR posted a loss of approximately 70 million Euros, with non-performing loans accounting for about 20% of the total loans.

According to the statements of Andreas Treichl, the CEO of Erste Bank, all the necessary measures will be taken to make BCR a leader, as part of its management team was recently replaced. He is convinced that BCR will soon give shareholders reasons to rejoice, just like its "sisters" in the Czech Republic and Slovakia, which have been posting high profits for years, the Austrian website says.

Another things that is causing problems for Erste is the Hungarian branch.

"What happened in Hungary has destroyed my comprehension ability", the head of Erste said. Aside from special taxes, which the bank was forced to pay by the Hungarian government, it was also forced to use a fixed exchange rate, and the bank was forced to bear the resulting losses.

Despite the difficulties, Andreas Treichl stands by his strategy for Eastern Europe, claiming that countries in Eastern Europe will see a greater growth in the coming years, than the countries in Western Europe.

Moreover, the head of Erste is already thinking of expanding into Poland and Bulgaria.

Last year, Erste Bank had a loss of 719 million Euros, the biggest in its 200 year history. The bank's stock crashed, management bonuses were cut, and shareholders will not receive any dividends.

On that subject, Andreas Treichl said the following, speaking to the 800 investors gathered at "Austria Center": "That is what I am truly sorry about. This won't bring you anything. But at least you know how we are doing".

It's true.

Badly.