Rebranding process decreased CEC Bank profit

State owned CEC Bank, one of the top ten local lenders, posted gross profit worth €11 million in the first seven months of 2008, due to high provisions and expenses generated by the rebranding process. The bank will resume negotiations with the European Bank for Reconstruction and Development (EBRD) in the following days regarding EBRD participation in CEC Bank's capital.

CEC Bank's estimated profit for 2008 exceeds €100 million, including the amount received from selling the 25 percent stake in Asiban insurance company. CEC Bank President, Radu Ghetea, said the bank is discussing with EBRD development perspectives and is establishing the company value. The EBRD could either participate in the capital, give a subordinate loan or provide financing solutions.

Ghetea said provisions worth €15 million had a strong impact on profits, due to the high level of loans granted to individuals, which make up 70 percent of the total credits. Bank representatives plan to maintain a balance between credits for individuals and those for companies. CEC Bank granted loans worth €500 million in the first seven months of 2008, 26 percent higher year-on-year.

Business Standard