The bank has raised 300 million lei (EUR68.3 million) at the issue, at an annual interest rate of 5.47%. It was the bank’s first bond issue on the local market.
“The proceeds will be used to finance future projects, as well as for on-lending to retail, corporate and SME clients,” said Ufuk Tandogan, chief executive of Garanti Bank Romania.
Garanti Bank’s bond issue drew demand from 23 Romanian investors as well as from the European Bank of Reconstruction and Development, which subscribed 15% of the bonds.
BRD-Groupe Societe Generale was bookrunner on the deal.
Garanti Bank is the 12-largest bank in Romania based on assets, with a market share of around 2%. The bank forecasts a 15% increase in its assets this year, from some EUR1.6 million reported at the end of 2013.
“We want to increase our market share, but it is a long-term strategy rather than an immediate goal. We aim for an organic growth, which doesn’t necessarily include acquiring portfolios from other banks,” Tandogan said.
The bank’s chief said Garanti has no plans to purchase any of its peers in Romania, but he didn’t rule out potential acquisitions of loan portfolios from other lenders, as long as it’s “a very good opportunity.”
Tandogan said the bank will open seven new units in Romania in 2014, after two years during which it has halted its territorial expansion. (EUR1=RON4.3918)