HVB brings 16.7m euros for merger with Tiriac

HVB Bank Romania last November operated a 16.7 million-euro capital increase, as part of the ongoing merger process with Banca Tiriac.

“It was an operation with a precise destination, considering the two banks” mutual evaluation process. I couldn”t say we really needed this capital increase, but we did need to reach parity for the merger,” Dan Pascariu, the chairman of HVB Bank, told Ziarul Financiar.

He says that procedures are on schedule so that the merger should be completed sooner than the habitual period of around one year.

“We are mainly waiting for several legal issues to be worked out, as they require certain approval deadlines. At the same time, we need to go through a series of intricate technical procedures,” Pascariu added.

Bank Austria Creditanstalt, the majority stakeholder in HVB Bank Romania, paid 248 million euros for 50% plus one in Banca Tiriac stock, in the merger deal signed with businessman Ion Tiriac last year.

Formally, Banca Tiriac is the one to absorb the domestic branch of HVB, due to the more favourable financial-fiscal terms entailed by this formula. The acquisition of the stake was finalised on September 1st, 2005, through equity purchase and swapping between the two sides.

For the time being, the two banks continue to operate independently, but there is already tight cooperation at the management level. Consolidation is also being attained through partnerships. For instance, Banca Tiriac has started selling the savings-lending product of HVB Banca pentru Locuinte, first through its agencies located in the Metro units and subsequently through its entire network.

Banca Tiriac is bringing an expanded network, including 68 units, in the merger with HVB, which will help the emerging entity to grow on the retail market.

The new bank will be called HVB-Tiriac, but this will only be an intermediary stage in the integration process with UniCredit Romania, the domestic branch of the Italian group that last year took over HVB Bank. Bank Austria, which is part of HVB and coordinates the operations of the German group in Central and Eastern Europe, already presents itself as a member of UniCredit Group.

The new entity will be controlled by Bank Austria Creditanstalt – HVB Romania””s majority shareholder – and will have assets worth over 2.5bn euros and a market share of 8%.

After the first three quarters of the year, Banca Tiriac posted 16.5 million euros in net profits, almost as much as it made in the whole of 2004.

The bank”s net assets came to just over 3bn RON (842 million euros) at the end of September, an increase of 22% in RON compared with December last year.

razvan.voican@zf.ro