Erste Bank's spokesmen Michael Mauritz stated yesterday that Erste Bank is currently reviewing its structure and it would decide about the new structure by the middle of 2007, but the bank ruled out a sale of shares in its eastern European assets. This statement came in response to the articles in Austrian newspapers that the bank considers creating a holding company in which group-wide tasks such as personnel or risk management would be handled centrally, and which would own the operating units in every country. This has led to speculations that Erste Bank might be interested in separate listing for its CEE business, such as take place in Raiffeisen Zentralbank group.
Our view: In our view Erste Bank would not benefit from spinning off of the CEE business, as market is well aware of the value of those assets. The news was out yesterday during the session, thus we do not expect significant trading impact today. We reiterate our Hold rating with a fair value of EUR 52.53 per share.