More than 10,000 BCR employees together own a third of the 3% stake in Erste belonging to the group's employees and the employees of the other subsidiaries should feel motivated to increase their interests, despite the rising price because this way they invest in an organisation that is focused on growth, said Andreas Treichl, chief executive officer of Erste Bank, during the General Meeting of Shareholders (AGA) for 2007.
"We're encouraging our employees to continue to buy shares," said Treichl, specifying that the target for the employees' interests was 5% of stock.
At the end of last year, over 90% of BCR employees became shareholders in Erste in the wake of the equity swap the Austrians proposed in order to boost their stake in the Romanian bank's capital to 69.2% from 61.8%.
At the same time, in May, BCR's employees had access to Erste's group employee loyalty programme of buying shares at discounted prices under the pledge of not selling the stock for at least one year.
Erste stock price last Friday reached 59 euros on the Vienna Stock Exchange, below the 61.50 record high hit in early May, but many investment banks expect the price to climb to 70 euros.
Erste AGA last Thursday approved the management's proposal on the disbursement of a 0.65 euros per share dividend, up 10 cents from the value approved for 2005.
Erste Bank has so far invested 4.2bn euros in BCR, as it took over almost 70% in the bank, namely almost 60% of the total sum the bank has invested since 1997 to the end of expanding on seven CEE markets by taking over more than 10 banks, announced Andreas Treichl.
Of the 4.2bn euros, 3.75bn euros represented the price paid for the takeover of the stake of almost 62% in BCR in the wake of the privatisation process, and another 228m euros were paid in cash to some BCR employees for taking over their stock. Treichl did not specify all the destinations of invested money.
To finance its takeover of the majority stake in BCR, Erste in early 2006 raised over 2.9bn euros from the stock market in the biggest placement on the Vienna stock exchange.
"The success of the capital increase operation was a great sign of shareholders' confidence in the management's decision to compete for BCR, and the fact that Erste stock continued to rise shows the confidence is still there," said Treichl, who thanked shareholders for supporting the group's expansion in the region.
He stated BCR could step up its income growth recalling the bank's solid performance during 2005-2006 period.
The Austrians are taking BCR integration process further while accelerating the expansion of the bank's operations.
Banca Comerciala Romana will open 60 more branches this year than it had initially scheduled, to reach a total of 125 new branches, in order to keep up with the competition.
It will also expand the facilities associated with the current account to address the weaknesses Erste's head Andreas Treichl too had noticed in this department compared with the competition.
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