Romaniaʼs central bank vetoes OTP acquisition bid
In a surprise move, the National Bank of Romania has rejected a request for approval by the Romanian unit of Hungaryʼs OTP Bank to acquire 99.28% of Banca Românească from the National Bank of Greece, the lender said in a disclosure posted on the website of the Budapest Stock Exchange (BÉT) early on Monday.
OTP Bank was notified by the National Bank of Romania of the matter on March 14. A communiqué released by the latter the next day does not specify the grounds for refusal of the transaction, stating that information obtained within its scope of authority as a banking watchdog constitutes a business secret under Romanian central bank law, Hungarian business news portal vg.hu reported.
"The management is analyzing the legal aspects of the letter of the supervisory authority," OTP said. The deadline for appealing the Romanian central bankʼs decision is March 29, 2018, it added.
"OTP Bankʼs management is still committed to enhance its presence in Romania via organic growth or further acquisitions," the lender noted.
The refusal comes as a surprise to the market, noted online financial news journal portfolio.hu. OTP announced the acquisition last summer, and it was approved by Romaniaʼs competition authority in December, which said the transaction would not harm free competition on the local banking market. The acquisition would raise OTPʼs market share in Romania to around 4%, making it the countryʼs eighth biggest bank.
Portfolio.hu recalled that OTP leaders have been talking for years about how the bank intends to strengthen its positions in other countries of the region through acquisitions, the goal being to attain close to a 10% market share in each market.
OTP Group Chief Executive Sándor Csányi said last October that the initial goal in Romania was to increase OTPʼs market share to 7-8%. Portfolio.hu said Csányi had described Romania as a favorable market due to its large population but relatively low take-up of bank products, indicating significant growth potential in the bank sector.
Reporting on the veto of OTPʼs acquisition, international news agency Reuters recalled that in February, Csányi had said the bank "had bad feelings about the outcome of the pending approval."
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