Hungary’s OTP Bank signs deal to buy Slovenia’s SKB Banks

By bne IntelliNews May 5, 2019

Hungary’s OTP Bank said on May 3 it has signed an acquisition agreement on purchasing a 99.73% shareholding of SKB Banka, the Slovenian subsidiary of Societe Generale Group, and other local subsidiaries held by SKB Banka.

OTP has already taken over subsidiaries of French lender Societe General in Bulgaria, Albania, Serbia, Moldova, Montenegro. Slovenia included, OTP will operate 12 foreign subsidiaries.

SKB Banka has a market share of 9% and is the fourth largest bank on the Slovenian banking market. It has been active in the retail and corporate segment as well.

The transaction is expected to be completed in the coming months. It is subject to obtaining permits from the competent banking authorities such as the Bank of Slovenia, the European Central Bank and antitrust authorities, Societe Generale said.

“This transaction is in line with the group's refocusing strategy, which aims to achieve a positive effect of + 80-90 basis points on its CET1 ratio by 2020. I welcome the strategic agreement reached with OTP which will allow us to continue to serve our clients in Slovenia and in many Balkan countries in various fields including investment banking, capital markets, corporate banking, cash and liquidity management,” Philippe Heim, deputy chief executive officer of Societe Generale Group in charge of International Retail Banking activities, Financial Services and Insurance, said.

The sale of SKB Banka is expected to have a positive impact on the Societe Generale’s CET1 ratio of around seven basis points and to reduce the group’s risk weighted assets by around €2.3bn. This transaction will also have a negative impact of €67mn on the group's first-half 2019 results, due to goodwill impairment.

In March, Slovenian media reported that OTP Bank had made the best bid to buy Slovenia's state-owned Abanka. OTP had reportedly made a €300mn non-binding bid for Slovenia's third-largest bank after NLB and Nova KBM with 10% of the market and €3.7bn in total assets. Abanka was among several banks taken over by the state during Slovenia’s bail-in of major banks in 2013. Slovenia's government wants to part with the lender by mid-2019 to comply with conditions related to the European Commission's approval of a state recapitalisation of the bank. Slovenia sold 65% of NLB in November and it plans to sell another 10%.

OTP wants to acquire three more banks in the region, after which it will take a break from a buying spree that has lasted for several years, chairman-CEO Sandor Csanyi told shareholders at the recent AGM.

On April 29, Croatian daily Jutarnji List said quoting unofficial sources that OTP Bank is interested in buying Croatia's seventh largest bank Addiko or the local unit of Raiffeisen.

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