MKB sells Bulgarian interests

MNB

More Hungarian/international banking news this morning, as Bulgaria-based First Investment Bank (FIB) has announced its full purchase of MKB Unionbank from Hungary-based MKB Bank, a subsidiary of Germany-based Bayerische Landesbank (Bayern LB), for an undisclosed amount. 

Bulgarian media is reporting that the purchase price had been rumored at about €50 million in earlier rounds of tendering, “but now market sources say it is lower.”

The deal has roots in a 2008 European Commission (EC) directive ordering Bayern LB’s restructuring due to poor investments; the EC and the bank reached an agreement in July 2012, with Bayern LB receiving a nearly €30 billion bailout package. By May 2013, the bank group was still suffering from the financial crisis, however, with “outstanding loan and securities receivables of BayernLB owed by [Austria-based Hypo Group Alpe Adria] in the sum of €2.4 billion maturing by the end of 2013 and 2014” just one example.

As of this writing, FIB shares were trading at BGN 2.54 per share, a nearly 7% increase since Wednesday. FIB is reportedly Bulgaria’s third-largest lender in terms of assets and according to Reuters, “is one of the few banks in the Balkan country that are not foreign-owned.” 

FIB reported assets of BGN 6.97 billion (HUF 1.06 trillion/€3.55 billion/$4.73 billion) at the end of June 2013 for an 8.4% market share; MKB Unionbank reported total assets of BGN 1.54 billion (HUF 234.78 billion/€785 million/$1.047 billion).

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