OTP Bank buys majority stake in Zepter banka for EUR 34.3 m (2)

The purchase price will be paid upon the closing of the transaction, after the receipt of the necessary regulatory approvals.

OTP Bank submitted a binding bid for the privately-owned Belgrade-based bank on 24 February, 2006. Based on its end-2005 total assets of EUR 76.70 million, Zepter banka has a nearly 1% share on the Serbian market. The bank's shareholders equity was EUR 16.5 million, while its after-tax profit was EUR 0.62 million at the end of last year.

Zepter banka was founded as a privately-held bank in 1992 under the name of Me¹ovita banka (MB) Zepter Banka, Beograd. The bank provides financial services to both retail and corporate clients. Besides providing the classic banking products, it is also a card issuer, operates 12 ATMs, and also provides internet and mobile banking services. The bank serves its 52,000 clients via 17 branches, out of which 6 are in Belgrade.

"Zepter's acquisition is another important step for OTP Bank in its expansion in the Serbian banking market. Serbia's economy and banking sector are developing at a spectacular pace, and the country offers several favourable opportunities for investors. All this inspires OTP Bank to increase its market share in the Serbian banking market," OTP Deputy CEO László Wolf said.

OTP Bank, a key financial institution in Central and Eastern Europe, is already present in Serbia and Montenegro. The acquisition of Ni¹ka banka was closed on 7 March 2006. OTP Bank also submitted an indicative offer for the Novi Sad based Panonska banka.

Acquiring Zepter is a great step forward for OTP. While the Serbian bank's size is far from being immense, OTP already has a similar-sized bank in the country and the possibility to merge the two into a medium-sized institution is now open.

As OTP missed out on every large bank in Serbia, it was left with no choice but to buy the small fry. Panonska banka is also on the target list, but we would be stunned if OTP did not have its eyes on several more.

OTP is virtually doing the work it has been done for it in Croatia: the merger of smaller banks. Nova Banka, for instance, was brought to life by merging several banks.

OTP paid 2.76x book value for Zepter, which boasts a 1% market share. In regional terms, this is a rather small price, but let's not forget that Zepter was not considered a really alluring target.

• Tags:
• equity