OTP Eyes Austrias BAWAG

10. Juli 2006, 00:00

According to unofficial reports, Hungarys largest bank OTP is said to have eyed Austrian bank BAWAG P.S.K

According to unofficial reports, Hungarys largest bank OTP is said to have eyed Austrian bank BAWAG P.S.K. (Bank fur Arbeit und Wirtschaft AG). The news comes shortly after Austrias banking group Oesterreichische Volksbanken (OeVAG) announced its official interest in the troubled Austrian peer.

Evaluated at EUR 1.7 billion (USD 2.1 billion), BAWAG is still believed a bank with solid standing on the the mature, but still growing Austrian banking market. Owner of BAWAG, Austrias trade union federation OeGB, has put it for sale after it plunged into huge losses as a result of speculative transactions in the Carribbean and murky deals bringing U.S. partner brokerage Refco Inc. to insolvency. At present, several creditors of Refco Inc. are making serious efforts to hunt down the U.S. assets of BAWAG.

This would be OTPs first purchase on the West European market. Until now, OTP made several acquisitions in East European countries and considering the acquisition budget of the bank, it is unlikely that they can afford to bid for BAWAG.

Last week, OTP announced it bought 67 per cent of the Serbian Kulska Banka for EUR 118.6 million (USD 151 million), and a few weeks ago they paid EUR 650 million (USD 827.8 million) for Raiffeisen Ukraine after the Raiffeisen International Group had to scrap to following its purchase of Bank Aval.

Again a week ago, the bank bought Russian Investsberbank for EUR 373 million (USD 477 million) and in June Crnogorska Komercijalna Banka (CKB), the largest commercial bank in Montenegro for EUR 100 million (USD 127 million).

Its acquisitions budget running dry, OTP Bank can only rely on partners of solid financial health to place a competitive bid. This would make the OTP the first Hungarian bank to make an acquisition on the West European market. Shares of OTP closed 3.65 per cent higher from Friday at HUF 6789 (EUR 24.2821).

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