Банкеръ Weekly

Briefs

CANDIDATES FOR DSK BANK COME TO LIGHT

All obscurities about the candidates to take part in the privatisation of DSK Bank disappeared at 2 p.m. on January 27, 2003. By then, the US investment bank JP Morgan, which is consulting the Bank Consolidation Company (BCC) on the sale of the state-run savings bank, had collected the offers for participation in the deal. It turned out that offers have been submitted by the Hungarian OTP Bank, the Austrian Erste Bank, and the Greek Piraeus Bank. All the three banks have applied for acquisition of 100% of the shares of the Bulgarian savings institution.The French EULIA bank group which showed interest in the sale of DSK Bank did not make an offer. Nor did an Icelandic bank which, according to the media, intended to do so. Forecasts that a consortium of Bulgarian investors would submit an offer for the last big local bank, owned by the state, did not come true, either. One day after the offers had been submitted - on the eve of the 50th birthday of Krassimir Angarski, Chairman of DSK Bank Managing Board, BCC's Board of Directors (together with their consultants) announced they would let all the three applicants inspect the legal and the financial status of the savings bank. Their experts will be allowed to enter DSK Bank on February 10, 2003, and each investor will have two weeks in order to make revision. When all of them have finished their work, BCC will wait for the bank's 2002 balance-sheet and profit and loss account (which will be harmonized with the International Accounting Standards) and will allow the investors to update their information. The name of DSK's buyer will be known in mid-April, said Nelly Kordovska, BCC Executive Director.On the contrary to the sale of Biochim Commercial Bank, this time BCC is not going to fix the lowest price, to be offered by candidates. One reason for that decision was that DSK Bank has much better market positions and financial results than Biochim. The candidates are expected to offer high prices for it.BCC and JP Morgan should try to repeat the successful privatisation of Biochim. In November 2002, Biochim was sold to Bank Austria for EUR82.5MN - an amount twice higher than the net value of the assets of the Bulgarian credit institution.According to financial experts, in order to consider the sale of DSK Bank successful, BCC should receive at least EUR260MN. A lower price would be inadequate for the Bulgarian second largest bank which controls over 12% of all assets of the national financial system, more than 95% of all consumer loans, more than 15% of all deposits of individuals and companies, and is able to provide over BGN60MN to the budget every year (in the form of tax on profit and dividends).The BCC is able to squeeze out the highest possible amount from the candidate buyers. In fact, it is selling the last state-owned bank in the country which will provide its new owner with strategic positions in the financial sector. Both Erste Bank and OTP have not stepped on the Bulgarian market yet. Piraeus Bank has a branch office in the country, but its operations are unnoticeable and do not correspond to the ambitions of the Greek bank.Financial experts in Bulgaria comment that Erste Bank and Piraeus Bank will be the major players in the bidding. The Austrians are considered the favourite. The Chairman of Erste Bank Board of Directors Andreas Treichel met Bulgaria's Finance Minister Milen Velchev several times. Their last conversation was held on January 13, 2003 in Vienna, where Minister Velchev and his deputy, Krassimir Katev, took part in the eighth meeting of the bond issuers from Central and Eastern Europe. However, Piraeus Bank should not be excluded from the plans, either. The Vardinoyanis group, of which the bank is part, is interested in acquiring a significant share of the Bulgarian financial market and the privatisation of DSK Bank is a unique opportunity for realization of its plans. So, the Greek bankers will hardly give up.

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