BANK Austria Creditanstalt (BA-CA) and its subsidiary in Bulgaria - HVB Bank Biochim - have signed an agreement to purchase Hebros Bank, Biochim announced on November 4.
The sellers of the 99.9 per cent stake are SWC BV and SWR Investments, independent investment management companies. The acquisition is yet to be approved by Bulgarian National Bank.
"By acquiring Hebros Bank, we have significantly strengthened our market position in Bulgaria," BA-CA chief executive Erich Hampel said, quoted by Biochim. "We are thereby increasing our market share to the level of 10 per cent that we have sought in this strategic core market," he said.
Hebros Bank's assets total 291 million euro (June 30, 2004), and its domestic market share is 2.9 per cent, which makes it the number 10 bank in this country. With a countrywide network of 92 offices and a total of 1000 employees, Hebros Bank serves 210 000 clients. The bank was created through the merger of eight state-owned banks in 1993. In 2000, it was sold to the Regent Pacific Group, lately renamed to iRegent. SWC is a Dutch-registered unit of iRegent Group (registered in Hong Kong) and asset manager SWR Investments.
Ownership of the purchased assets will be divided between BA-CA and Biochim at a ratio of nine to one. The remaining 0.1 per cent is owned by small shareholders.
The deal is the first bank acquisition in Bulgaria since the end of the banking privatisation and it opens the way for long awaited consolidation processes in the local banking sector.
After taking over the tenth largest bank in the country, bank Austria gains a 10-per cent market share locally. A merger between HVB Bank Biochim and Hebrosbank is scheduled for 2006.
BA-CA was named Bank of the Year for Central and Eastern Europe by the Bulgarian weekly newspaper Banker for third consecutive year in 2004.
Last week, Banker calculated that iRegent Group has achieved a 450 per cent return from selling Hebros. The exact price of the deal was not disclosed, but according to Hampel it exceeds twice the capital of Hebros, which at the end of September was about 106 million leva.
Media speculated that BA-CA was ready to pay over 120 million euro (about 240 million leva) for Hebros. A day after the sale contract was signed, sources at HVB Bank Biochim and Hebros have told Banker that the price paid was 110 million euro, and it is considered by experts as too high. However, Bank Austria will acquire not just the assets of the Bulgarian bank but also its business in the country - its network of branches and market positions.
- Business Staff
The sellers of the 99.9 per cent stake are SWC BV and SWR Investments, independent investment management companies. The acquisition is yet to be approved by Bulgarian National Bank.
"By acquiring Hebros Bank, we have significantly strengthened our market position in Bulgaria," BA-CA chief executive Erich Hampel said, quoted by Biochim. "We are thereby increasing our market share to the level of 10 per cent that we have sought in this strategic core market," he said.
Hebros Bank's assets total 291 million euro (June 30, 2004), and its domestic market share is 2.9 per cent, which makes it the number 10 bank in this country. With a countrywide network of 92 offices and a total of 1000 employees, Hebros Bank serves 210 000 clients. The bank was created through the merger of eight state-owned banks in 1993. In 2000, it was sold to the Regent Pacific Group, lately renamed to iRegent. SWC is a Dutch-registered unit of iRegent Group (registered in Hong Kong) and asset manager SWR Investments.
Ownership of the purchased assets will be divided between BA-CA and Biochim at a ratio of nine to one. The remaining 0.1 per cent is owned by small shareholders.
The deal is the first bank acquisition in Bulgaria since the end of the banking privatisation and it opens the way for long awaited consolidation processes in the local banking sector.
After taking over the tenth largest bank in the country, bank Austria gains a 10-per cent market share locally. A merger between HVB Bank Biochim and Hebrosbank is scheduled for 2006.
BA-CA was named Bank of the Year for Central and Eastern Europe by the Bulgarian weekly newspaper Banker for third consecutive year in 2004.
Last week, Banker calculated that iRegent Group has achieved a 450 per cent return from selling Hebros. The exact price of the deal was not disclosed, but according to Hampel it exceeds twice the capital of Hebros, which at the end of September was about 106 million leva.
Media speculated that BA-CA was ready to pay over 120 million euro (about 240 million leva) for Hebros. A day after the sale contract was signed, sources at HVB Bank Biochim and Hebros have told Banker that the price paid was 110 million euro, and it is considered by experts as too high. However, Bank Austria will acquire not just the assets of the Bulgarian bank but also its business in the country - its network of branches and market positions.
- Business Staff
