a??HVB Tiriaca?? will the name of the new bank that will emerge shortly in the wake of the merger between HVB Bank Romania, a branch of the German-Austrian group HVB/Bank Austria Creditanstalt (BA-CA), and Banca Tiriac, which is controlled by Ion Tiriac.
The two parties have signed a pre-contract which will entail the creation of the fourth-largest bank in the Romanian banking system with assets of 2.080 billion euros and a 72-strong branch network.
Quoted by Mediafax on Sunday, Regina Prehofer, who is a member of the management board at BA-CA, said the contract for the merger between HVB Romania and Banca Comerciala Ion Tiriac would be signed over the next few weeks.
This merger will mean the Romanian banking marketa??s first and largest consolidation operation, given that most of the 39 players on the market own shares of at most 1%.
HVB Tiriac will enter the market with a market share of around 7.5%, and as such will become a direct contender for third position on the market, currently held by Raiffeisen Bank with slightly over 9%. According to HVB, the newly merged bank will aim for a market share of 10%.
The merger will see CEC (The Romanian Savings Bank) fall to fifth position in terms of banking assets, with a share of below 6%.
Bank Austria Creditanstalt will hold over 50% in HVB Tiriac and will have complete control over the operations of the new bank.
a??This decision gives us a considerable head start over our direct rivals,a?? said Erich Hampel, the chairman of Bank Austria.
While having been courted by a number of investors recently, Ion Tiriac says he was reluctant to sell Banca Tiriac.
a??I am delighted with the merger with HVB Bank Romania. The two banks are a perfect match, and through this merger we will be able to benefit from the dynamic development of the Romanian financial market.a??
The merger is expected to be finalised by the end of the year and then submitted to authorisation procedures by the NBR and the Competition Council.
Together with HVB, Banca Tiriac has re-entered the top ten banks on the market, after slipping to the eleventh position at the end of last year.
As a contribution to the new structure, the bank is bringing with it total assets worth 706 million euros as registered on March 31, 2005, a network of 60 branches, 1,100 employees and a portfolio of 685,000 customers.
At the same time, HVB will climb three positions in terms of assets from seventh position, ahead of its two Dutch competitors, ING and ABN Amro.
HVB Romania has assets of around 1.4 billion euros, double the value of Banca Tiriac. However, its network has only 12 branches, is served by 320 employees, and has only 32,000 customers. razvan.voican@zf.ro
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