Slim Chance Of Seeing BCR Listed This Year

• Dominic Bruynseels, BCR: "Is this a good time for listing? No!"

Ana Săbiescu

The listing of Banca Comerciala Romana (BCR), the largest bank in Romania, on the Bucharest Stock Exchange (BSE) has become inopportune because of difficult conditions on the capital market and could be postponed. If so, the BCR privatization contract will be amended until October, according to BCR CEO Dominic Bruynseels. He stated earlier this week that the bank would observe the provisions of the privatization contract and, if a change was necessary, it would be made before the deadline. The privatization contract stipulates that BCR must be listed on BSE within three years from the end of the privatization process, which would be this Autumn. The contract also specifies that, if the listing fails, it must be resumed within one year. Although the timing for a listing is not so good and the decision to postpone seems correct, discussions with the Romanian authorities regarding such postponement and the related amendment to the privatization contract have not yet started.

Representatives of BCR and majority shareholder Erste Bank have repeated stated that it would be a mistake to list a bank under the current negative circumstances on the capital market. The financial investment firms (SIFs) are also supporting the decision to postpone as they are very happy with the dividends they could receive from the bank. BCR could disburse dividends in the amount of 813 million RON, if the shareholders endorse the motion of the Supervisory Board during the General Meeting called on 14 May 2009. The amount is equal to 40% of last year"s net profit of 2.03 billion RON, calculated as per the International Financial Reporting Standards.

The BCR CEO stressed that dividend disbursement was inline with the conditions set in the privatization contract, that is, to allocate 40% of the profit as dividends. Under these circumstances, the SIFs, which hold 6% in BCR, will receive gross dividends of 48.78 million RON each, up by 120% from last year, when they received 22.07 million RON. Banca Comerciala Romana became fully private in 2006, when Erste Bank acquired 70%.