Communications Ministry wants the Romanian Post to establish bank and an insurance broker

Newsroom 17/06/2011 | 08:31

The Communications Ministry, which holds 75 percent of the shares of the Romanian Post, wants the company to have a bank and insurance broker. With this move it is hoped that the company will make better use of its network and bring in additional revenues, the Communication Minister Valerian Vreme told Mediafax.

“With this plan we want to be more transparent, and eliminate any doubt there might be over the management of the Romanian Post,” explained Vreme.

According to a draft project by the Communications Ministry, the Romanian Post will establish two new commercial entities to be called The Romanian Post Bank and Romanian Post Insurances. It will also close seven of its branch offices and reorganize its regional centers in the postal network to cut personnel costs and increase revenues. The Romanian Post will be the only shareholder in the two entities.

“Romanian Post Insurances will deal with insurance brokerage. As far as the bank is concerned, we plan to attract an experienced company with the needed financial resources. With these proposals, after the draft bill will be approved by the government, we will have the legal option, to establish the two entities, but we will not assume it is compulsory to do it. Everything, especially the bank, depends on the results of a study, of a business plan,” Vreme said.

According to Central Bank regulations, a credit institution needs a minimum social capital of RON 37 million for its establishment. For insurance brokers the minimum capital is RON 25,000.

In negotiations carried out with the IMF, the government committed to cutting off at least 70 administrative positions within the state-owned company, and that it will reduce the number of post offices by more than 900 units by the end of July. The restructuring process will affect 2,000 employees, around 6 percent of the Romanian Post’s total number of employees. A part of them will be let go.

The shareholders of the Romanian Post are the Communications Minister, with a 75 percent stake, and Fondul Proprietatea, which holds the remaining 25 percent.

The Romanian Post has a network of 7,100 post offices. In 2010, it reported losses of EUR 29 million and a turnover of EUR 327 million.

 

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