July 27 (SeeNews) - OTP Bank Romania said on Thursday it has signed an agreement with National Bank of Greece (NBG) to buy Banca Romaneasca (BROM) for an undisclosed sum.
The transaction involves the shares in BROM held by NBG, as well as the purchase of additional exposures in Romania belonging to other subsidiaries of NBG, OTP Bank Romania, a subsidiary of Hungary-based OTP Bank said in a press release.
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The acquisition will increase OTP Bank Romania's market share to around 4%, making the bank the eighth largest lender in Romania.
By acquiring Banca Romaneasca, OTP Bank Romania will becomes the most significant middle-sized bank in the country. "The new entity, due to its active lending activity, will contribute to the development of the Romanian economy through more intensive support and financing of SMEs and companies," OTP Bank Romania CEO László Diósi said.
The financial completion of the transaction is expected to take place by early 2018, after the receipt of necessary regulatory approvals, László Wolf, Deputy CEO of OTP Bank's commercial banking division, said.
"OTP Group is dedicated to further invest in the Romanian market, but further acquisition transactions will be considered only after full and successful integration of the present one," Wolf added.
The customers of Banca Romaneasca have no special duty in relation to the transaction. For the time being the conditions of all contracts remain unchanged, including CHF loan conversion programme for BROM customers, OTP Bank Romania said.
At the end of 2016, BROM was the 14th largest bank of Romania with a market share of roughly 1.62%. It is active both in the retail and the corporate segments as a universal bank, employing 1,148 in 109 branches across Romania.
Its end-2016 assets stood at 1.57 billion euro ($1.82 billion), with gross outstanding lending of 1.148 billion euro and an equity of 145 million euro. The financial institution's return on equity (ROE) in the last two years was 3.8% and 8.2%, respectively.
OTP Bank Romania is the eleventh largest bank in the country. OTP has been present in Romania since 2004 and currently operates a network of 100 branches where 1,126 work.
At the beginning of 2016, OTP Bank Romania acquired Millennium Bank from Portugal's Banco Comercial Portugues for 39 million euro, becoming 11th biggest Romanian bank in terms of assets with a 2% market share.
OTP Bank Romania's consolidated adjusted after-tax profit doubled year-on-year in the first quarter of 2017, reaching 4.2 million euro, mainly due to higher total income and lower operating costs.
The bank's total assets decreased 3.0% on the year to 1.92 billion euro at end-March.
($=0.8602 euro)
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