In an interview with Romanian daily Ziarul Financiar, Erste CEO Andreas Treichl provided an update on restructuring plans for BCR. It was reiterated that restructuring costs would reach € 40m for full-year 2007, up from € 11.4m in 1H07 and that the bank would open 100 new outlets this year at an average cost of € 120k. It was confirmed that redundancies, as a result of the bank’s transformation, would be announced in September, as a net result of 2,700 staff no longer being required in back office and 1,000 new jobs being created by network expansion in the next two years. It was commented that progress was being made on stemming the deterioration of market share in mortgages and that competition on pricing has eased. Finally, a rebranding exercise was announced, whereby BCR will retain its own brand name but adopt Erste Bank colours (red and blue) starting from September.
Our view:
The comments in the local Romanian press were largely a reiteration of earlier statements made following the release of the bank’s 1H07 results. Therefore, we do not expect a significant trading impact today.