Hungary's FHB Jelzálogbank will acquire Allianz Bank, the latter group's Hungarian banking unit, for about HUF 3.8 billion through a share swap under contracts on long-term exclusive strategic cooperation between FHB and the Allianz group on July 2, the bank said on Monday.
The transaction, in which FHB pays for 100% of the shares of Allianz Bank with 1,829,864 of its own ordinary shares and around HUF 1.1 billion in cash, is expected be closed by September 30. The final price will depend on the net assets of the Allianz banking unit on closing of the transaction.
The FHB shares received for the shares of Allianz bank make up about 2.8% of all FHB shares, Econews calculated. According to earlier information they will be directly held by Allianz Hungária Biztosító, the group's Hungarian insurance unit, which is already FHB Bank's third largest shareholder, with a 9.57% stake.
The transaction will raise the number of FHB branches to 70.
The long-term cooperation between the FHB group and the Allianz group is for twenty years, with no option of withdrawal in the first five years, has been designed to make use of sales and cross-sale potential of the clientele of the two groups, and specifically, of FHB Jelzálogbank and the insurer Allianz Hungária Biztosító. The contracts make Allianz group in Hungary and FHB group the exclusive distributor of the other group's products.
The Allianz distribution network will take part in the distribution of specified baking, investment and life products of the FHB group while FHB will service Allianz' nearly two million clients and will sell the Hungarian Allianz group's insurance, pension, health fund products and investment units through its network.
The contracts are in line with a letter of intent signed after almost five months of talks in the middle of June. Allianz Hungária Biztosító and FHB group has been cooperating now for almost ten years.
FHB said that Allianz Bank had IFRS total assets of HUF 102 billion at the end of March 2010, including HUF 42 billion in client loans, with 70% linked to retail mortgages. Allianz Bank had net assets in excess of HUF 6 billion at the end of March, its capital adequacy ratio was over 14%. The bank which started operations in the autumn of 2006, had 49 branches servicing 125,000 clients.
FHB group had IFRS consolidated total assets of HUF 772 billion, including close to HUF 591 billion in client loans at the end of March 2010. Retail mortgages made up 55% of all loans. Average return on net assets was 13.1% and the cost-revenue ratio was 43.3% in Q1. The capital adequacy ratio, including profit for the period was 10.3% on March 31.
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 Spéder, holding 16.28%. The fourth largest shareholder following Allianz is Silvermist Estate SA with a stake of 9.55%. (MTI-ECONEWS)