The Romanian Savings Bank Will Be Sold By 2005

The National Savings Bank will be privatized by the end of 2005. The bank’s management stopped lying off until a privatization consultant will be selected. Enache Jiru, the new resident of the bank, said yesterday that the consultant for privatizing the National Savings Bank will be selected by the end of September.

The consultant will present its privatization strategy by February 2005 and in March the Executive will approve it for opening the public budding procedure. "My estimate is that by the end of 2005 the privatization process would have ended, including the signing of the contract," said Jiru.

The wide network of local subsidiaries the National Savings Bank has is its best asset: it is the widest in the Romanian banking system, and thus a plus for investors specialized in retail banking, said Jiru.
He believes that the banks will start targeting the rural areas for doing business, as the city areas start to get saturated [with banking services]. This situation gives the National Savings Bank a clear advantage, given the inertia clients in rural areas have.

Jiru says that restructuring the bank brought about a raise in the bank’s productivity per employee. The bank shrunk the number of subsidiaries from 1,749 in 2000, to 1,424 at present. Of those still working, 550 subsidiaries are placed in the urban areas, while 867 are open in rural areas. The main criterion for closing down subsidiaries was to check their balance of expenses and revenues. At this moment another 100 subsidiaries have expenses in excess of their revenues and are about to be closed down. Most of such subsidiaries are in the rural areas.

Restructuring the bank also took into account scaling down the number of employees. Of the 12,000 employees in 2000, some 9,270 are still with the bank today, and another 500 will lose their jobs this year.
"The cut-down of personnel should long have taken place, but now we will have to wait for the opinion of the consultant because we do not want to take decisions that will likely influence the sell price without first knowing its opinion," said Jiru.

As for investments, Jiru said these will be prudent, as bold investment schemes are not recommended prior to privatization as they may not match the vision of potential investors. Jiru said that bringing the bank in line with information technology will go on and that the total investment plan for this year is around 200 billion lei (5 million euros).