Erste Bank and the Hungarian Privatization Agency signed the purchase agreement as regard the state’s 99.97% stake in Postabank yesterday. Also, Erste presented its strategy concerning the Hungarian market: Erste will operate its two Hungarian subsidiaries, Postabank and Erste Bank Hungary, under a common management in 2003-04 and will merge them by end-2004. Restructuring will include staff cuts (less 29% by 2005), branch-network downsizing (-18%), and IT modernization; related restructuring costs are expected to exceed EUR 32m over 2004-06. Erste should become the second-largest retail bank on the market in terms of retail loans and deposits. Financial targets for a new merged subsidiary are: an ROE above 15% and 25% in 2005 and 2006, respectively, and cost/income ratio of 65% and below 60%, respectively.
Erste Bank also reiterated its key 2005 financial targets: an ROE of 15%, cost/income ratio of 60-62%, and net profit of EUR 500m. A huge restructuring at Postabank has been expected due to its poor performance in the past three years (it has been a loss-maker over 2001-03); we consider Erste´s financial targets for Postabank as rather ambitious.
Jan Hájek