In the first seven months of this year, OTP concluded the acquisition of Niska banka in Serbia and Montenegro; acquired the privately-owned Zepter banka in the same country; purchased Raiffesenbank Ukraine from Raiffeisen International; announced the signing of the purchase agreement to acquire 96.4% of Investsberbank Group, headquartered in Moscow; and acquired a third Serbian bank, Kulska banka.
OTP has made a bid for CEC, Romania’s state-owned bank, and is interested in Bawag of Austria.
It also made indicative bids for two Serbian banks, Vojvodjanska banka and Panonska banka, to the Serbian government’s Deposit Insurance Agency (DIA). The DIA is handling the privatisation of banks in which the state has a significant interest. However, based on information from the DIA, it seems OTP failed to make the short-list for either bank.
OTP also made a binding offer for Ukrsotsbank in the Ukraine, where it lost out to Banca Intesa – although it appears that Intesa is delaying completion of the deal pending the resolution of issues involving Ukrsotsbank’s principal shareholder, Victor Pinchuk. The failure of OTP’s bid prompted its interest in Raiffeisenbank Ukraine, when Raiffeisen International decided not to merge it with its more recent acquisition, Bank Aval, but sell it instead. The Raiffeisenbank and Investsberbank deals are subject to regulatory approval.
The three Serbian banks that OTC has acquired have a combined market share of about 3% and total combined assets of €261m ($315m) at year end 2005. They were acquired for a combined outlay of €167m.
Raiffeisenbank Ukraine had assets in excess of €1.2bn at year end 2005 and had a market share of 3.6% in corporate business and 1.6% in retail business. OTP will pay €650m to acquire the bank.
The Investsberbank Group consists of Investsberbank in Moscow, Promfinservicebank in Novorossiysk and Omskpromstroibank in Omsk. The two subsidiaries, acquired in 2000 and 2004 respectively, are in the process of being legally merged into the parent with completion scheduled for August 2006. The group had assets of €979m at year end 2005 and posted pre-tax profits of €9.1m. OTP will pay €373m to acquire it.
These acquisitions complement the four foreign subsidiaries that OTP already has in place. In April 2002, it acquired Investicná a Rozvojová banka in Slovakia (now OTP Banka Slovensko); in 2003 it bought DSK Bank in Bulgaria; in April 2004 it acquired Banca Comerciala ‘ROBANK’ (now OTP Bank Romania); and in March 2005, it purchased Nova banka in Croatia and renamed it OTP banka Hrvatska.
In financial year 2005, 24.6% of OTP’s total assets were domiciled outside Hungary, which generated 11.1% of pre-tax profits. Losses at OTP Bank Romania had a negative 1.2% impact on the subsidiaries’ aggregate profit figures. At year end 2005, consolidated assets for the OTP Bank group were $24.4bn and consolidated pre-tax profits were $899m.
