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OTP Bank set to boost presence in Romania despite refusal to take over BROM

OTP Bank set to boost presence in Romania despite refusal to take over BROM OTP Bank Author ( License: all rights reserved.

BUCHAREST (Romania), March 19 (SeeNews) - Hungary's  OTP Bank said on Monday it remains committed to grow its presence in Romania despite the recent central bank's refusal to endorse its deal for the takeover of Banca Romaneasca (BROM).

"The management is analyzing the legal aspects of the letter of the supervisory authority, the deadline for appealing against the objection is 29 March 2018. Nevertheless, OTP Bank’s management is still committed to enhance its presence in Romania via organic growth or further acquisitions," OTP Bank said in a press release.

Romania's central bank, BNR, said on Thursday it refused to approve the agreement for the takeover of BROM by OTP Bank Romania, a subsidiary of OTP Bank. The central bank opposed OTP Bank Romania's intention to acquire a direct qualifying holding of 99.28% in BROM from National Bank of Greece. BNR gave no reason for its decision, citing the confidentiality of information obtained during the exercising of its powers in the field of authorization, regulation and prudential supervision of credit institutions.

BNR's decision came after Romania's anti-trust regulator approved the takeover agreement in December.

In a separate statement NBG said on Monday the operations of Banca Romaneasca have not been affected by BNR's decision.

"BROM continues to focus on its clients’ needs while maintaining profitability levels and strong capital base, on the back of the continuous support by NBG Group. NBG is considering various strategic options in relation to its operations in Romania and in line with its Restructuring Plan," NBG said.

OTP Bank Romania signed the deal with NBG for an undisclosed sum at the end of July. 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 said at the time.

The acquisition would increase OTP Bank Romania's market share to around 4%, making the bank the eighth largest lender in Romania.

OTP Bank Romania's consolidated adjusted after-tax profit of its Romanian unit surged 88% year-on-year in 2017, reaching 44.85 million lei ($11.9 million/9.62 million euro). Its operating profit rose by 12% on the year to 138 million lei in 2017, as a result of stable operating expenses and higher total income.

(1 euro=4.6620 lei)