Finance Ministry officials have refused to confirm or deny what may be a harmful lack of interest in one of their key banks - Investičná a rozvojová banka (IRB) - after press reports said that the finance house had only attracted one interested party.
Reports in domestic media late in October said that the London-based Regent group were the only bidders for the bank. The government had been hoping to have the tender for the bank, one of three strategic financial institutions to be sold off in the next year, completed by the end of this year. However, following the press reports concerns have grown that the bank may not now be sold under tender.
Finance Ministry spokesman Jozef Mach said that he was unable to comment on the reports but added that an announcement on the IRB tender would be made November 8. However, Richard Lysakowski, head of the bank privatisation department at the Finance Ministry, remained optimistic on the sale of the bank.
"I can neither confirm or deny the press reports but there is still a lot of work going on behind the scenes and I remain positive about the [tender for the] bank," he said. He added, though, that alternative plans were being drawn up for the scenario of the bank sale failing in a tender.
"If the tender is not successful then we will have to look at other ways of pressing forward with [a sale of] IRB. We are certainly drawing up alternative plans because the whole Slovak banking sector is in a phase where banks are being sold and we are looking at ways to push these banks out into the private sector," Lysakowski said.
The government is looking to sell a 69.65% stake in IRB, and the final date for expressing interest had been set for October 31. Originally only one other bank had expressed preliminary interest - the Austrian Bank fur Arbeit und Wirtschaft AG (BAWAG) - but had pulled out to concentrate on domestic activities.
Representatives for Regent expressed surprise at being linked to the bank. "We have no idea where these reports are coming from. We cannot possibly comment on these at the moment," a spokesperson for the firm told The Slovak Spectator October 31. Regent has invested in the Russian banking sector, recently acquired Hebros Bank in Bulgaria and has stakes in the Croat banks Dalmatinska banka and Banka Zagrebacka.
The government is also looking to sell state stakes in both Slovenská sporiteľňa (SLSP) - the country's largest bank, and Všeobecná úverová banka (VÚB). While SLSP has already attracted large preliminary interest, and VÚB is expected to see something similar, IRB's recent woes are, analysts say, largely to blame for the bank's failure to attract interest.
The central bank put IRB under a caretaker administration in December 1997 after it ran into serious problems with liquidity. The regime was lifted last December, and most of IRB's classified loans have been transferred to the recently-formed state agencies Slovenská konsolidačná and Konsolidačná banka as part of a 100 billion crown ($2 billion) mop-up operation of the banking sector.
The lack of interest in the bank and the possibility of only one group competing in the tender may not, some analysts have argued, necessarily mean that any sale of the bank will be a bad one.
"Of course, everyone wants to see interested buyers [for IRB] from many different countries. But the question is really one of getting a good sale. If there is only one bidder and it is still a good sale, then that will not be a problem. But if there is only one bidder and there is the chance that the sale may not be good then it may be better not to go ahead with the sale at all," said Anton Marcinčín, consultant for the World Bank in Slovakia.
IRB reported a pre-tax profit of 4.5 million crowns ($90,000) in the first nine months of 2000, its first positive result in almost three years, and ended the same period with assets of 28.4 billion crowns.