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BUCHAREST (Romania), April 17 (SeeNews) - First Bank, formerly known as Piraeus Bank Romania, said on Wednesday it has signed an agreement with Israel's Bank Leumi le-Israel B.M to purchase its subsidiary in Romania for an undisclosed sum.
The deal is expected to be finalized within the second part of the year, First Bank said in a statement.
The acquisition of Bank Leumi Romania is part of First Bank’s strategy to increase and consolidate its presence in Romania, aiming to become a strong banking player on the local market, First Bank's executive president Dominic Bruynseels said, adding the lender remains open to similar growth opportunities.
"This is the second acquisition that the American investment fund JC Flowers & Co. has made on the Romanian market in less than a year, proving its interest and commitment in this valuable market," Bruynseels noted.
The transaction is subject to approval from Romania's competition authority and central bank.
“The sale of Bank Leumi Romania to First Bank, which is owned by a leading international financial entity, will enable the continued implementation of Leumi’s ‘follow your customer’ strategy. This agreement constitutes yet another step in the implementation of Leumi’s international deployment strategy, which is focused on commercial banking operations through our subsidiaries in the US and UK, and in other regions through collaboration with leading local entities,” Bank Leumi Israel first executive vice president and head of strategy, innovation and transformation division, Hanan Friedman, said.
Bank Leumi tried to sell the Romanian subsidiary last year to British investment fund Argo Group Limited but failed to do so as it was unable to get the necessary regulatory permits.
Bank Leumi Romania was opened in 2006 and operates a network of 15 units in 12 Romanian cities, employing 200. Its assets amounted to 250 million euro ($282.2 million) at the end of 2018, while deposits totalled 150 million euro.
Greece's Piraeus Bank sold its Romanian subsidiary to J.C. Flowers & Co. in June 2018, who changed the bank's name to First Bank in September 2018.
J.C. Flowers, founded in 1998, has invested nearly $15 billion, including co-investment, in 55 portfolio companies across 18 countries.
($= 0.8859 euro)