Csányi puts €1.1 bln price tag on upcoming OTP acquisitions

Food

The four foreign banks Hungary's OTP Bank Rt is in the running for would cost a combined €1.1 billion, OTP CEO Sándor Csányi said in an interview in Wednesday's issue of business daily Napi Gazdaság.

If the purchases go ahead, the bank will not require external financing, nor will it change its dividend policy, he said. OTP has never bought high-priced banks and the price it will offer for the four banks will be realistic, reflecting their growth potential, Csányi said. Within a few years, growth among OTP Bank's foreign units will be enough to offset its slowing expansion on Hungary's market, he added.
Decisions on the purchases of the four banks (Serbia's Kulska Banka, two banks in Ukraine and one in Russia) could be taken as soon as the end of June. The price has already been set for three of the banks, and negotiations are nearing completion on the fourth bank, Csányi said. The Russian bank has branches as far away as the edge of Siberia, meaning its purchase would expand OTP Bank's geographical market significantly, he added.
Csányi shrugged off the narrowing margin in Hungary, pointing out that the stock of credit cards is increasing. He admitted that the slowing of mortgage lending was a sore spot but in his hopes this could prove only temporary.
Asked whether he thinks Hungary's government could extend Hungary's two-year extraordinary banking tax into 2007, Csányi said the prime minister would not break his promise, made in public, to scrap the tax at the end of 2006.
Csányi, who oversees his own food empire in addition to the bank, says he still devotes 85%-90% of his energy to OTP Bank. He added that he has never been tempted to enter politics, as some sources reported earlier this year.

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