What will CEC do with the 235m-euro state injection?

The state will inject 450 million RON (117 million euros) in the capital of CEC Bank in the first quarter of 2009, seeing the bank as playing a decisive role in lending money to the economy, while the management is looking at the financing of the rebranding process.

This is the first instalment of a 900 million RON (235 million euros) increase approved by the Government, with the rest of the money set to be transferred by the end of next year. As a result of the two increases, the capital of the bank will be more than double the current level.

"We need to make a series of investments in changing the image of the bank and in the IT system considering that we operate a significant network. These are extensive investments," commented Radu Ghetea, CEC Bank chairman, who did not specify the exact amount that is to be invested in 2009. The bank has a network of about 1,400 branches, the biggest of the system. Ghetea says the funds will be temporarily placed in T-bills or lending and be gradually used for the investment process.

CEC, the oldest bank in the system and held by the state, adopted a new strategy this summer to revamp its image and develop on the segments of local companies and low-income clients that are not targeted by the major competitor banks.

Ziarul Financiar