BUDAPEST (Reuters) - Hungary’s OTP Bank OTPB.BU expects to hear by early July whether it has succeeded with a bid for Banca Romaneasca, deputy chief executive Laszlo Wolf told Reuters, adding that OTP was looking at other deals to boost its Romanian market share.
OTP, central Europe’s largest independent lender, said this month it had submitted a binding offer for the National Bank of Greece (NBGr.AT) business, which has 109 branches in Romania according to figures on its website.
Already a dominant player in Hungary and Bulgaria, OTP has been beefing up its presence across central and eastern Europe, taking advantage of a pullback by Greek and western European lenders amid a tighter profit outlook and stricter regulations.
“In my estimate, there will be news about the signature of the deal for Banca Romaneasca in late-June or early-July,” Wolf said at the Reuters Central & Eastern Europe Investment Summit.
“If all goes well, we will be able to reach 7-8 percent,” in Romanian market share, Wolf said in an interview at his office.
“Not with this deal alone, but overall, it would be good to reach 6-7-8 percent,” he said, which would double or triple OTP’s Romanian footprint.
He said OTP, which acquired Societe Generale’s (SOGN.PA) Croatian unit, Splitska Banka late last year, was also looking at possible expansion opportunities in neighboring Serbia.
Wolf added, however, that an acquisition project in Montenegro, a deal flagged by OTP Chief Executive Sandor Csanyi in March as “nearly complete,” appeared to fall through due to a lack of regulatory approval.
“This is the first time since we have been actively buying that a supervisor signals that they do not approve,” he said. “For the time being, the Montenegrin project is on hold.”
Wolf said increased lending volumes and higher income from fees could help OTP mitigate the impact of persistently low interest rates, but smaller banks could struggle as interest income stagnates or even declines.
“Tightening compliance rules are also creating additional costs,” he said.
“This further increases pressure to reach scale, because small banks will find it more and more difficult to meet regulations, while costs will only go higher.”
Reporting by Marton Dunai and Gergely Szakacs; Editing by Keith Weir