Competition Authority Clears Acquisition of OTP Bank Romania

The acquisition of OTP Bank Romania has been approved by the Romanian Competition Authority, economedia.ro reports. As a result, OTP Bank will withdraw from the Romanian market. In its efforts to strengthen its position on the Romanian market, OTP Ba

By: hungarytoday.hu

Jul 16 2024
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Competition Authority Clears A

The acquisition of OTP Bank Romania has been approved by the Romanian Competition Authority, economedia.ro reports. As a result, OTP Bank will withdraw from the Romanian market.

In its efforts to strengthen its position on the Romanian market, OTP Bank Romania has explored strategic acquisition opportunities. In 2017, the bank showed interest in acquiring Banca Românească, but the transaction was rejected by the National Bank of Romania. In 2020, OTP Bank aimed to acquire Garanti BBVA Romania, but the negotiations were not concluded and the transaction did not materialize. After these failed attempts, the management of the financial institution decided that it made little sense to remain in Romania under the existing conditions. OTP Bank was the only bank in Romania that served its Hungarian-speaking customers in their native language.

In February, Banca Transilvania and OTP Bank announced that they had reached an agreement on the transaction.

The sale price amounts to EUR 347.5 million and is therefore lower than the net asset value of the subsidiaries to be divested as reported in the consolidated financial statements. As a result, the transaction resulted in a negative after-tax impact of HUF 59.5 billion (EUR 152.11 million) on the consolidated financial statement, already recognized in the fourth quarter of 2023.

“The financial closing of the transaction is expected in 2024, subject to the necessary regulatory approvals,” OTP Bank said at the time.

With this transaction, OTP Bank will withdraw from the Romanian market.

Now, giving the go-ahead to the acquisition, the Romanian Competition Authority concluded that “the operation does not raise significant barriers to effective competition in the Romanian market or in a part of it and there are no serious doubts as to its compatibility with a normal competitive environment”.

Headquarters of Banca Transilvania in Cluj. Photo via Wikipedia

Banca Transilvania is the market leader in the Romanian financial sector by assets. As a result of the acquisition, the assets of the Cluj-based (Kolozsvár) financial institution will exceed RON 180 billion (EUR 36 billion) and its market share will reach 22.5 percent. According to data from the National Bank of Romania, at the end of 2023, Banca Transilvania had assets worth RON 161.857 billion (EUR 32.6 billion) and a market share of 20.15 percent. OTP Bank is the tenth largest player in the Romanian market with a 2.46 percent share, with assets worth RON 19.763 billion (EUR 3.9 billion) at the end of last year.

Fact

OTP Bank Group is Hungary’s largest commercial bank and one of the largest independent financial services providers in Central and Eastern Europe, offering banking services to individuals and corporate clients. OTP Group has subsidiaries in insurance, real estate, factoring, leasing and asset management, investment, and pension funds. In addition to Hungary, OTP Group operates in several countries of the region through its subsidiaries including Albania, Bulgaria, Croatia, Serbia, Slovenia, Ukraine, Moldova, and Montenegro.

Hungary's Largest Commercial Bank OTP among the Top 30 in Europe