Hungary's OTP Bank plans to invest $200 million in its recently-acquired Russian unit Investsberbank, Russian daily Vedomosti reported on Monday.
OTP Bank Nyrt will inject $200 million into the bank to expand its network and broaden its product portfolio, Investsberbank deputy CEO Anton Mihalkov told the paper. The first $50 million of the capital raise will come in the Q1 of next year, he said. So far this year, Investsberbank has introduced new products for SMEs as well as for retail clients, including car loans. Next year, the bank will launch a mortgage loan program, Mihalkov said.
OTP Bank acquired 96.4% of Investsberbank at the end of October after paying 90% of the $477.5 million purchase price. The remaining 10%, or $50 million, was placed in escrow to cover possible guarantee claims for a period of one year. OTP Bank said earlier it planned to recoup its investment in 8-10 years. Investsberbank targets a 60% increase in total assets in 2006 over last year's €979.5 million. It expects pre-tax profits of €25 million - 30 million. (Mti-Eco)