Romania CEC Bank to raise capital to EUR 254.9mn.

By bne IntelliNews April 6, 2011
The shareholders of Romania's fourth largest local lender, state-owned CEC Bank, decided to raise the bank's share capital by RON 52.9mn (EUR 12.87mn) to RON 1.048bn (EUR 254.9mn), mainly by incorporating the previous year's profit, the bank said in a statement on its website. The capital increase will be funded with RON 49.9mn from the 2010 profit and RON 3mn from the re-evaluation of some of land plots. The capital hike was first proposed by the bank's CEO Radu Ghetea in February when he motivated it, saying that it would strengthen the bank's market presence. The proposal was preceded by public discussions, related to the bank's possible privatisation. After unofficial sources from the government indicated that strategic investors are looking after a minority stake in CEC Bank, PM Emil Boc stressed that the banks privatisation is not on the governments agenda. The government abandoned in 2006 its attempts to sell off CEC Bank since it was not satisfied with the EUR 560mn offer from the sole bidder, the National Bank of Greece. The government also could not boost the banks capital on its own, since the EU forbids such forms of state aid. CEC Bank's gross profit increased by 30% y/y to RON 65mn (EUR 15.3mn) in 2010.
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