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August 15, 2022
BUSINESS

Erste’s Treichl says BCR to recover very soon

Erste Group Bank Chief Executive Officer Andreas Treichl told shareholders that Romanian lender Banca Comerciala Romana, his most expensive bet on growth in eastern Europe, will recover “very soon”, businessweek.com informs. “I’m convinced that Romania will be a cause of joy in the future,” Treichl said at Erste’s annual general meeting today, where he presented a EUR 719 million loss partly caused by the Black Sea country. BCR “was an expensive acquisition that was necessary for the development” of Eastern Europe’s second-biggest lender after UniCredit SpA, Treichl said. “The recovery will come very soon.” A writedown on BCR, for which Erste paid six times book value in 2006, was one of the reasons Erste reported its first loss last year since at least 1988. Bad debt charges in Hungary and losses on credit default swaps also contributed to the shortfall. Erste is asking shareholders at the AGM to do without a dividend for the first time since going public in 1997. “I’m glad this year is over,” Treichl told about 1,900 shareholders at the meeting. Erste said last month that bad loans in Hungary and Romania will remain a drag on profit for longer than it predicted earlier. Erste is filling a capital hole that emerged when rules were tightened to protect European lenders against the region’s debt crisis. The shortfall widened in October, when Treichl announced the losses in Hungary, Romania and on the CDSs.

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