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CIG Pannónia signs cooperation agreement with Gránit Bank

Publically-traded Hungarian life insurer CIG Pannónia Életbiztosító (CIG) and its non-life-insurance unit CIG Pannónia  Első Magyar Általános Biztosító have signed a strategic cooperation agreement with Hungary's Gránit Bank, CIG Pannónia said late on Tuesday.

CIG signed a letter of intent on May 30 with Gránit Bank regarding conclusion of a strategic cooperation agreement in the future.

The aim of the agreement is to harmonize operations and offer services jointly to retail and business clients, CIG said.

Details of a mutual acquisition of stakes will be prepared in the future, the insurer said.

The May 30 announcement said the two companies plan to acquire minority stakes in one another, and the exact size of the stakes, as well as the method and conditions of their acquisition will be part of the strategic agreement to be signed within 30 days from the signing of the letter of intent.

Joint products to be offered to retail and business clients include insurance packages connected to mortgages or bank cards; premium financial services; free-purpose business loans combined with specific unit-link life insurance products; property and liability insurance packages for SMEs; and home insurance packages.

The three companies also plan to jointly develop new products and services and cooperate in entering segments of the Hungarian financial-intermediation markets where neither of them is currently present, GIC said on Tuesday.

CIG Pannónia is a listed insurance company set up in 2008 by Hungarian business people, including former central bank president Zsigmond Járai, who is chairman of the insurer's supervisory board. CIG Pannónia  had after-tax losses of HUF 679 million on revenue of HUF 7.9 billion from premiums in the first quarter, according to unaudited consolidated IFRS figures.

Granit Bank is a small bank recently acquired by Hungarian construction magnate Sándor Demján's Hungarian Capital Company, a company that Demján established to help Hungary's SMEs recover from the economic crisis, with total assets of HUF 13.1 billion at the end of 2010, according to preliminary figures.