OTP expands in Croatia; CEO promises stability
OTP Group has completed the acquisition of the Croatia-based Banco Popolare branches, with OTP banka Hrvatska settling the purchase price of HRK 107 million (approximately €14 million), per an OTP Bank announcement of late yesterday.
OTP banka Hrvatska signed the purchase agreement at the end of January on acquiring a 98.37% stake in the bank, and the Croatian Central Bank approved the acquisition on April 18.
Following the transaction, OTP Group will serve 440,000 customers at 163 branches and with over 250 ATMs.
Csányi: OTP to remain stable even with worst-case scenario in Ukraine
OTP Bank would withstand the shock of a widening conflict between Russia and Ukraine, including a worst-case scenario in which Hungary’s largest lender were to lose its investments in the two sparring nations, CEO Sándor Csányi stated in an interview with Bloomberg news service published yesterday.
“Should we lose all our investments in Russia and Ukraine, our core Tier-1 capital ratio would still remain above 12%,” Csányi reckoned. “Even this unthinkable scenario would be unable to rattle our stability,” the CEO said.
Csányi said provisioning at OTP, which has operations in nine countries in Central and Eastern Europe, was rising in both Ukraine and Russia and OTP’s Ukraine profitability was at risk. “Based on the current situation, it will be difficult for our Ukrainian bank to produce a profit, barring a positive resolution to the crisis,” Csányi stated, adding that OTP was ready to write down all its Ukrainian unit’s remaining goodwill if needed this year.
The Russian operations will “hopefully remain profitable” in 2014 even if there are some quarterly losses amid risk costs that have “practically doubled. However, we can already see signs of improvement,” Csányi said.
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