Hungary's FHB Bank signed a letter of intent with the insurance company Allianz Hungária Biztosító on June 16 on long-term exclusive strategic cooperation and on the acquisiton of Allianz Bank, the group's Hungarian banking unit, FHB announced on Thursday.
FHB Bank would take over 100% of the Hungarian Allianz Bank from Allianz Hungária Biztosító through a share swap as part of the transaction, the statement said.
Allianz Hungária Biztosító, which is already FHB Bank's third largest shareholder, holding 9.57% of the shares, has undertaken to remain a significant shareholder on the long run as part of the cooperation.
The long-term cooperation between the FHB group and the Allianz group is planned for twenty years, with no option of withdrawal in the first five years, and would cover the distribution of banking and insurance products as well as other products sold by the two groups at present. Both Allianz group and FHB group would be the exclusive distributor of the other group's products.
FHB noted that Allianz Hungária Biztosító and FHB group have been cooperating now for almost ten years.
The acquisition of Allianz Bank would raise the number of FHB Bank branches to exceed 70, the bank said, adding that the extended network would continue to serve the existing insurance and banking clients of Allianz group in the future too.
The letter of intent was signed after almost five months of talks which began in January.
The final contracts are planned to be signed after further negotiations in July 2010, FHB said.
The last available figures for Allianz Bank show it had total assets of HUF 60.5 billion at the end of 2008, including net assets of HUF 6.05 billion. The bank which started operations in the autumn of 2006, had net losses of HUF 5.4 billion in 2008.
FHB group had total assets of HUF 801 billion, including net assets of HUF 47.4 billion at the end of 2009 according to audited IFRS consolidated figures. It closed last year with consolidated after-tax profit of HUF 7 billion.
FHB Bank's largest shareholder is the Hungarian unit of Vienna-based VCP Finanz with 24.20% of the shares followed by A64 Vagyonkezelő, a company of FHB board chairman Zoltán Speder, holding 16.28%. (MTI-ECONEWS)