OTP Bank doesn't expect “reasonable” price for CEC

OTP and National Bank of Greece SA are competing to buy a 70% stake in CEC, Romania's last state-owned bank for sale. Both lenders have already started their own banking networks in Romania to take advantage of rising demand for consumer loans and mortgage financing as the country prepares to join the European Union January 1. “We don't think we can buy it at a reasonable price” and OTP is seeking an acquisition at a “realistic” price, Wolf said at a banking conference in Frankfurt today. He declined to name specific figures, only saying there is a “significant difference” between what OTP is offering for CEC and the price the Romanian government is reportedly seeking

Budapest-based OTP and other Hungarian companies such as Mol Nyrt are targeting acquisitions in countries where growth is outstripping their domestic market. Hungary's growth is slowing as the government raises taxes and cuts spending as part of austerity measures designed to reduce the country's budget deficit, the widest in the EU. OTP has spent more than $2.2 billion in the past five years buying 10 banks from Bulgaria to Russia. The Romanian government may choose the winner for the sale of the stake in CEC between November 25 and November 30, the Imerisia newspaper reported earlier this month, citing Reuters. “It will be very hard to agree on a price,” Wolf said. Even if OTP isn't willing to pay the asking price for CEC, the National Bank of Greece will also have difficulties in paying it, he said. The negotiations for CEC may take “a long time,” he added. OTP plans in 2007 to focus on organic growth in countries where it is already present by opening new branches, Wolf said. The bank doesn't plan any acquisitions unless an “exceptional target” comes along. The Hungarian bank will reach its full-year earnings target and doesn't plan to raise the forecast for 2006, Wolf said. (Bloomberg)