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OTP plans investments of €77 mln, not €200 mln, at Russian unit in 2007

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Hungary's OTP Bank Nyrt on Monday dismissed press reports that it plans to invest €200 million at its Russian unit Investsberbank next year.

OTP Bank said it would invest €77 million at the unit in 2007. Russian daily Vedomosti reported on Monday that OTP Bank would inject $200 million into Investsberbank to expand its network and broaden its product portfolio, citing Investsberbank deputy CEO Anton Mihalkov.
In an interview with Reuters published on Thursday, OTP Bank CEO Sándor Csányi said OTP would spend between €120 million and €200 million in 2007 to recapitalize subsidiaries, primarily in Russia, Romania and Croatia. The bank also plans to save cash in order to increase its dividend, Cáanyi said.
OTP Bank has signed contracts to buy six banks in 2006: Raiffeisenbank Ukraine, Russia's Investsberbank, Serbian banks Kulska banka, Niska banka and Zepter banka, and CKB in Montenegro. OTP acquired 96.4% of Investsberbank at the end of October after paying 90% of the $477.5 million purchase price. The remaining 10%, or $50 million, was placed in escrow to cover possible guarantee claims for a period of one year.
OTP Bank said earlier it planned to recoup its investment in 8-10 years. Investsberbank targets a 60% increase in total assets in 2006 over last year's €979.5 million. It expects pre-tax profits of €25 million-€30 million.

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