OTP Banka Srbija has acquired Vojvodjanska banka and NBG Leasing from the National Bank of Greece for EUR 125 mln, or nearly HUF 39 bln at current rates. The deal also includes the sale of a portfolio of Serbian corporate loans, OTP top management announced in Novi Sad after closing the transaction.
OTP’s Serbian unit signed a contract for 100% of the share capital of Vojvodjanska banka and NBG Leasing, as well as other loan portfolios belonging to NBG in August. OTP announced last week that it had closed the deal, which will make it Serbia’s seventh largest bank with a market share of more than 6%. It will be the third largest in the country based on its network of branches. Integration of the new acquisition is expected to finish in the second quarter of 2019, although the website of Vojvodjanska already displays the new logo.
Management not yet sated
OTP entered Serbia in 2005 and has bought two more banks since then, OTP Group Chairman-CEO Sándor Csányi said at the press conference. Growth in Serbia is still not finished, however, and OTP is ready to make further acquisitions should a suitable bank that fits OTP’s strategy go on sale, he added. The bank is also looking to enter new markets next year as it has the cash available to shop around.
The new acquisition, Vojvodjanska banka, is strong in the agriculture sector, with the leasing company having a 40% share of that market. OTP plans to accelerate the digital transition of its Serbian holdings and to increase its share of the retail and corporate markets.
OTP has not yet decided what to name the bank, although Csányi believes Vojvodjanska is a stronger brand in Serbia, so it may continue under that name,
Speaking about future acquisitions, Csányi said due diligence was ongoing at a potential target in Russia, and OTP could buy up to six banks next year. Answering a quastion from Portfolio, Csányi acknowledged that Serbia’s Komercijalna was also on the radar, among others, but the sale of that bank is yet to go ahead.
Serbian operation could use a boost
As reported earlier, OTP Srbija is among the OTP acquisitions that do not contribute much to group-level profit in the best of years and takes massive losses in bad years. While the Serbian unit accounts for less than 1.5% of the OTP Group’s total balance sheet or loan and deposit stock, and breaks even in good years, it registered losses of nearly HUF 41 bln between 2009 and 2013 and required the group to make several cpital injections in recent year. The Serbian OTP is hindered by a bad loan portfolio, with a default rate of more than 25% compared to the group’s average of just 11.2%