“We paid a high price [for BCR] from today’s point of view… [But] from the strategic point of view, you won’t find anybody, neither on the managing board nor on the supervisory board, that would say going to Romania was not a good thing,” Treichl told a news conference, after Erste announced it will take extraordinary charges following goodwill write-downs at its Hungarian and Romanian operations.
Earlier Monday, Erste said it will partially write down its Romania-related goodwill by EUR700 million pre-tax, reflecting a slower-than-expected economic recovery. The measure is part of a larger package of extraordinary charges which are expected to turn the group’s profit of some EUR700 million for the first nine months into a loss of about EUR920-EUR970 million, Erste said in a statement.
In 2006, Erste Bank bought a 61.88% stake in BCR, for EUR3.75 billion, within a privatization process.
Mid-September, the group announced a preliminary agreement to buy a total 24.12% in BCR from regional investment funds SIF Banat-Crisana (SIF1.RO), SIF Transilvania (SIF3.RO), SIF Muntenia (SIF4.RO), and SIF Oltenia (SIF5.RO) for an estimated EUR435 million.
Erste shares dove 12.5% in Vienna Monday, to little over EUR18 per unit. At one point, the bank’s stocks were down 17% on the day.
In Bucharest, Erste shares were down 12.17% at around 13:21 local time, to RON79 per share.