The National Savings House (CEC) reported for the first quarter of the year gross profits of RON 24 M, up 60 per cent as compared to the corresponding period of 2006, against the background of a 60 per cent increase in credits granted to customers, to RON 3.5 bln, according to data made public by the bank yesterday and quoted by Mediafax.

The volume of credits granted by the State-owned bank to non-banking clients was 425 per cent higher than at the end of Q1, 2005.

Deposits attracted by the bank amounted to RON 6.5 bln, i.e. 18 per cent more than in March 2006 and 37 per cent over the level reported in March 2005. The bank reported for the first three months of the year total assets of RON 7.5 bln. The number of cards issued by CEC was 280,000, approx. one year after the service was launched. The sole shareholder in CEC is the Romanian State, which tried to privatise the credit institution last year, but terminated the process after having received only one tender, from the National Bank of Greece (NBG), which was deemed as too low. The Greek bank bid EUR 560 M for the major stake in CEC.

Romanian officials announced that CEC would be restructured in view of the privatisation, but the process would not be resumed sooner than two years. The State also decided to raise the bank equity by RON 500 M.

CEC will invest RON 170 M in 2007 in development and in the new brand of the institution, the CEC chairman announced.

“We are planning to change the bank brand, and we have budgeted for 2007 as much as RON 170 M,” Radulescu pointed out.

The CEC restructuring programme will be funded from the RON 500 M equity increase operated in 2006, which is expected to be enough until 2009.

“The RON 500 M accounting for the share capital increase will do another two years,” the CEC official explained.

CEC plans to launch a housing bank, most likely this year, a leasing company towards the end of the year or early 2008, and to contract funding from international markets, bank chairman Eugen Radulescu told a press conference yesterday, adding and the housing bank project had already been discussed with officials for the National Bank of Romania (BNR).

The bank has not yet decided whether it will issue bonds in foreign capital markets or will contract a foreign loan, Radulescu explained. He mentioned that the operation was likely to take place this year.

Housing banks provide savings-crediting products which involve a minimum saving period, followed by the granting of a fixed-interest credit for housing purposes.

Operating in this market already are Raiffeisen Banca pentru Locuinte and HVB Banca pentru Locuinte, and BCR may also join the group this year.