After several months of talks, Eurobank, the main shareholder of Bancpost and its investment bankers handling the deal, Mediobanca and HSBC, have selected Banca Transilvania for final talks.
If the negotiations led to a deal, Bancpost’s takeover would boost Banca Transilvania’s market share to 16%, allowing it to compete with the largest bank in Romania, BCR, on equal footing for the top spot.
BCR has been the local market leader for 17 years, but lost market share during the crisis, going from 25% at the beginning thereof to 16% at the end of 2016.
Banca Transilvania experienced hardship from late 2008 through 2009, when it was on the verge of selling to BRD Societe Generale, Bank of Cyprus or National Bank of Greece.
However, it set as its strategy during the crisis to grow by taking over the business left by other banks, which has paid off so far.
Its biggest acquisition was Volksbank’s Romanian operations at the end of 2014, which allowed it to dislodge BRD from second place.
Banca Transilvania’s market capitalization stood at 9.8 billion lei (EUR2.1 billion) on Thursday. It posted RON1.2 billion net profit in 2016, the highest in the entire economy. On the other hand, it has to offset the loss incurred with the Volksbank takeover.
The issues under discussion in Bancpost’s takeover are the repayment of the lines of credit to its parent bank and capital payment. Bancpost, which ranks ninth on the market, has RON11 billion assets and 2.9% market share. (EUR1=RON4.5984)
(English version by Loredana Fratila-Cristescu)