“We are an active and interested party in what happens in Romania and our strategic interest in this country has allowed the government to get financing at good interests. We are a major participant in every Finance Ministry auction,” says Wimmer, former strategist of the Austrian group, who was in charge of BCR takeover.
At the recent European stress test, Erste announced an exposure to the Romanian government of nearly EUR5.4 billion at the end of 2010. The overall exposure to Romania was EUR20.3 billion. The Austrian group competes over the title of the state’s largest financer with France’s Societe Generale, which controls BRD.
Wimmer says BCR benefitted over the last few years from being part of a large group, as it had easier access to markets. “On its own, it most certainly could not have funded itself from the external market.”
He also mentions the fact that Erste Group was leader of the “Vienna Initiative”, whereby the leading foreign banks present on the Romanian market pledged in early 2009 to keep their exposure to the Eastern European country.
As for the “commercial” relationship between Erste and its local subsidiary, BCR, Wimmer says it develops at market prices.
Erste doesn’t provide funding or services to BCR for prices lower than the market price, and it doesn’t withdraw money at preferential prices, says Wimmer. “Every time we charge the BCR for the funding or for various services, we do it at comparable prices to those of the market, nothing else would be allowable.”