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Banking

Erste insists the CEE party is not over

While some analysts worry about the Austrian bank’s effect on prices in central and eastern Europe, others have a great deal of confidence in CEO Andreas Treichl and his X factor. Julian Evans reports.

ERSTE BANK’S SHARE offer in late January, lead managed by Goldman Sachs and JPMorgan, raised €2.6 billion, making it the biggest capital markets transaction ever in Austria. The capital was raised mainly to finance Erste Bank’s €3.7 billion acquisition of a 62% stake in Banca Comerciale Romana, the largest bank in Romania, in December.

Some analysts thought that investors might baulk at such a big offering, more than twice as big as the previous largest, the €1.1 billion IPO of Raiffeisen International in April 2005. But the deal did well, with the share price rising by 15% in the two weeks after the offer.

Following the issue, the bank and its CEO, Andreas Treichl, were the toast of Vienna. They had executed the biggest share offer on the Wiener Börse, to finance the biggest acquisition ever by an Austrian company. “It’s a great day for my institution and a great day for Austria,” Treichl said on the day Erste won the bid for BCR.

He was right – Erste helped drive the Wiener Börse’s ATX index up through the 4000 mark for the first time, in January, in a rally that had taken it from 2000 in July 2004.

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