The market value of BRD-SocGen, the second-largest bank on the market, yesterday exceeded 3bn euros due to its strong growth on the Bucharest Stock Exchange, a trend followed by many of the listed shares.
Shares in BRD ended the day at 16.1 RON/share, an increase of 3.9% from the previous day, after having gone up to a maximum of 16.2 RON/share.
The total capitalisation of the Stock Exchange exceeded 18bn euros yesterday, an increase of nearly 2.5bn euros since the beginning of the year.
The BRD shares trend confirms the 6bn value of BCR, the largest bank in the system, resulted from the takeover of a 61.8% stake in the bank by the Austrians at Erste.
In the middle of last year, BRD accounted for 14.1% of the market, which is more than half of BCR''s market share, which stood at 25.1% in terms of assets at the time. The value this bank has reached on the Stock Exchange is huge, compared with the price at which the state sold the majority shareholders, Societe Generale, a 7.3% stake in BRD in November 2004. The deal was worth 43m euros, thus evaluating the bank at 590m euros. BRD was worth 1.1bn euros on the Bucharest Stock Exchange at that moment. The controlling interests in BRD, 51%, had been sold by the state in 1998 for $200m.
"The increase in the BRD shares is in line with the general trend on the market. Created by the optimistic expectations about integration and financial results. BCR saw six times its accounting value paid for it, despite being an as yet unrestructured bank, and it is only natural for the value of listed banks to come close to this mark," says Rares Nilas, BT Securities'' general manager. BRD''s market value is approximately 5.3 times its accounting value last year.
BRD shares had been lagging behind the growth of the market over the last few months, and especially that of Banca Transilvania, which went through several months of strong growth due to its profits and market share. Brokers say the increase of BRD''s shares over the last few days is due to the entry of new funds on the market that focus on buying Stock Exchange blue chips. "BRD and Petrom are the most solid companies on the market. It was natural that sooner or later BRD''s shares would continue their growth, given that new money continues to enter the market. I believe investors are looking to the future, to the results for 2007 and 2008, when buying BRD shares," says Valentin Ionescu, EuroInvestVision head of operations.
BRD made a net profit of 124m euros (448m RON) in the first nine months of 2005, 104% higher in euros than in the corresponding period of the previous year.
Its assets exceeded 5bn euros by the end of the third quarter, mainly because of the growth in consumer lending and funds attracted from companies. The bank thus achieved growth of about 1bn euros in the assets it managed in the third quarter.
The increase in BRD shares gave a boost to SIF shares yesterday, as they each own about 5% in this bank, stakes which are now worth 150m euros, in addition to the 360m euros accounting for their 6% stakes in BCR. vlad.nicolaescu@zf.ro
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