New bank acquisition by OTP Bank in Slovenia
OTP Bank signed a sales contract on the purchase of an 80% stake in the investment funds managed by the subsidiaries of Apollo Global Management and a 100% stake in Nova KBM owned 20% by EBRD. Purchasing the bank is the most significant acquisition in the history of OTP Group so far, enabling the Banking Group to become market leader in Slovenia, as well. The transaction is expected to be completed financially in the second quarter of next year, subject to obtaining all required regulatory approvals.
With a 20.5% market share in terms of total assets, Nova KBM is the second largest bank in Slovenia, a key player in the Slovenian financial market. In addition to retail and small businesses services, it also provides a full range of banking services to medium and large companies. The financial terms of the transaction were not disclosed by the parties.
Nova KBM, whose profitability has steadily improved in previous years, acquired Abanka in 2020, the third largest player in the Slovenian banking market. The integration of the two banks was concluded last December. This latest transaction completed in the euro area stands out in the history of OTP Group; its significance is demonstrated by the fact that after the acquisition of Nova KBM and the closure of the transaction, OTP (as the owner of SKB and Nova KBM) will become market leader in the Slovenian banking market both in terms of its loan and deposit portfolios with a share of almost 30%.
The financial closure of the transaction is expected to take place in 2022 Q2, subject to all required regulatory approvals.
'Even before, we considered our presence in Slovenia an enormous opportunity and, in line with the strategy of OTP Group, we have been looking for further growth opportunities in the country ever since we entered the market in 2019. That year, we acquired SKB Bank, the fourth largest player of the Slovenian banking sector, which has since been successfully integrated into OTP Group.
With the new transaction just announced, OTP Bank will become the key, number one player in the Slovenian financial market.
The acquisition of Nova KBM will enable us to further strengthen the already outstanding stability and profit-generating ability of OTP Group while growing faster than any other competitors. This process is not over yet; we are currently examining the possibility of further acquisition opportunities across the region’, said László Wolf, Deputy CEO of OTP Bank.
Anita Stojčevska, CEO of SKB Bank said:‘Thanks to an excellent team of employees and with the strong support of the owner OTP Group, SKB Bank successfully completed the integration with the group and at the same time achieved excellent business results. The professional community (The Banker, Global Finance and Euromoney) has recognised SKB Bank as Best Bank in Slovenia for several years in a row, and the Bank maintains its Superbrands position even under the OTP brand name. OTP Group is a strategic owner, which is proven by its support for the digital transformation strategy of SKB Bank. The goal of the strategy is to offer the best customer experience solutions and to achieve continuous growth in various market segments. We can continue to rely on the support, assistance and cooperation of OTP Group in the coming period. I strongly believe that we will build Slovenia’s largest bank together and that we will continue to play an important role within the OTP Group.'
John Denhof, CEO of Nova KBM added:‘Over the last years, Nova KBM has undergone an amazing journey, and has positively transformed itself along virtually every dimension. The bank has met or exceeded all of its strategic targets, has more than doubled its balance sheet, has successfully merged and integrated four banks including most recently Abanka. Meanwhile, it has achieved sustainable profitability, strong regulatory compliance and sound operational resilience. In addition, we have profoundly improved our corporate culture in recent years, modernised our IT and risk infrastructure, and simplified our products and processes to be able to offer best in class financial services for our clients across all segments. We should all be very proud of what we have achieved together, and I wish to personally and sincerely thank all of our incredible staff and also our shareholders, Apollo and EBRD, for the constant support, investment and focus.
It should be no surprise that our success has led to economic interest in our franchise. As we enter the next phase of our development, I am very confident that OTP ownership will be highly beneficial for both our clients, our staff, and other key stakeholders. The resulting bank will be an undisputed market leader, with unprecedented national reach, offering tremendous opportunities for our people and a long-term foundation for even greater successes.'
OTP Bank has been one of the most active financial institutions in the European acquisitions market. Following the 2008 financial crisis, new transactions started in 2014, and since then OTP Bank has announced the purchase of 11 financial institutions and banking portfolios in 9 countries and then completed their successful integration into the Banking Group. In addition to Slovenia, OTP Group has entered new countries such as Albania and Moldova. With this unique acquisition performance, OTP Group has become the most active banking sector consolidator in Central and Eastern Europe, substantially improving its market position and augmenting the profit contribution of non-Hungarian group members.
OTP Group, headquartered in Budapest, Hungary is one of the most stable financial groups in the CEE region with outstanding profitability and stable capital and liquidity positions. The group’s parent bank, OTP Bank is a public listed company with a diverse international ownership structure.
At present, the Banking Group provides universal financial services in 11 countries to more than 16.3 million customers; it has a network of nearly 1,500 branches and 38,000 employees.