OTP Bank, Hungary's largest banking institution that holds assets accounting for 85% of the entire Romanian banking system, has entered the Romanian market by taking over Robank, two years after its failure to buy BCR (Romanian Commercial Bank).
The transaction that was sealed yesterday marks the beginning of an aggressive expansion strategy to be enforced by the Hungarian bank. The strategy will be supported by a major investment in Robank, worth no less than 100 million dollars. This is a very large amount for Romania.
OTP has highly ambitious projects for the next 3-4 years: 100 subsidiaries and a market share of 4-5%, whereas Robank currently accounts for 0.8% of the market.
"We do have quite an extensive experience with retail banking and specific technologic solutions, so that we can be very competitive," said Sandor Csanyi, president and CEO of OTP, which is Hungary's former Savings Bank.
Most of the investments, namely 70-80 million dollars, are budgeted for the next three years. According to the deputy general manager of OTP Bank, Laszlo Wolf, the money will help to expand the territorial network, develop the IT system and the card infrastructure.
OTP will build an integrated financial group structure in Romania, as well, so as to have every sector of financial services covered with combined product packages and distribution systems. "The next steps will be our entry on the insurance, leasing and investment fund markets," the president and CEO of the Hungarian bank said.
The bank has not decided yet whether to enter the insurance market by taking over an existing company or by establishing a new insurer, but the decision "will be made shortly."
OTP is the leader on the Hungarian market of mortgage credits. "In several years, this market will also boom in Romania, so that we want to be ready," Csanyi stated.
OTP paid $475 million for the entire stake in Robank. "OTP Bank is paying a fair price, in line with the bank's value. The price was expressed in US dollars, based on very complex calculations," Sandor Csanyi said.
Before yesterday's transaction, Balli Group Plc directly held 36.5% in Robank and another 15% indirectly, through the former Anglo-Romana (Anglo-Romanian) insurance company. Mustafa Bayraktar, a Turkish national, owned 45.5% in the capital, while British Vahid Alaghband held a 2% stake. Also, Turkish national Huseyin Bayraktar owned one percent in the bank. According to OTP officials, all the official licensing procedures will be completed in about three months.
Csanyi has not ruled out more acquisitions in Romania, which could help the bank grow faster. OTP has been looking at the Romanian market for several years and, at some point, rumours pointed to a takeover of Banca Transilvania by the Hungarian Bank. Two years ago, OTP voiced interest in Romania's largest bank - BCR (Romanian Commercial Bank), but the bid was rejected by the Romanian authorities.
As for the name of the bank, the new shareholders have not made any decision yet, but the future name will certainly include OTP.
razvan.voican@zf.ro
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