OTP bids farewell to BCR, keeps eyeing Romanian market

Hungarian bank OTP has accepted the fact that its bid for the privatisation of BCR (Romanian Commercial Bank) will likely be rejected and has already moved on to other potential takeover targets that could enable it to enter the Romanian market.
The chairman of OTP Bank, Sandor Csany yesterday told the Hungarian press that the institution had contacted a Romanian bank, with the official talks set to begin as soon as OTP receives a definitive answer from the Romanian authorities as to its BCR offer.
The head of OTP hopes the bank will finalise an agreement with the respective Romanian bank at the beginning of next year. “Negotiations may begin this week,” Csany said.
Banking market sources told Ziarul Financiar that OTP Bank is eyeing Banca Transilvania, where the European Bank for Reconstruction and Development (EBRD) holds a 15% stake. In case the Banca Transilvania deal falls through, OTP Bank will turn to Banca tiriac, which also counts EBRD among its shareholders.
OTP submitted a bid for Romania’s largest bank (BCR) together with Bank Austria Creditanstalt, a member of German group HVB. The two banks teamed up in a consortium, planning to acquire equal stakes.
The Romanian authorities felt the bid did not meet the criteria stipulated in the privatisation legislation, as the Hungarian state holds a stake in OTP. Moreover, the Hungarian bank does not rank among the world’s top financial institutions.
Finance minister Mihai Tanasescu is negotiating a new privatisation schedule for BCR this week, with an IMF delegation led by Neven Mates. Talks also revolve around the manner that will be used to resume the privatisation process.
According to banking sources, since the OTP/Bank Austria consortium broke up, Bank Austria’s participation on its own is almost ruled out, especially since HVB cannot afford to take over BCR, which is valued at 1.5 billion dollars.
Furthermore, rating agency Standard&Poor’s yesterday voiced concern on the weaker performance of Germany’s second-largest group and issued a negative rating outlook.
Under the circumstances, the Romanian authorities would only be left with the bid of French company Eulia, which cannot be accepted in its current form, since the institution is backed by a state-held bank.
Most analysts agree that, at least until next year, BCR is not likely to get more bids, because of the problems affecting the large international banks.