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OTP Bank Romania takes over Millennium Bank Romania under 39-mln-euro deal


OTP Bank Romania, member of OTP Group, has signed the contract for the takeover of 100% of Millennium Bank Romania shares, a member of Banco Comercial Portugues, with the deal standing at 39 million euros, Laszlo Diosi, the CEO of OTP Bank Romania, told a Wednesday's conference.

Laszlo Diosi explained that this amount includes the costs of integrating Millennium Bank, and the funds will be provided through a capital increase. The transaction needs the go-ahead from Romania's Central Bank and the Competition Council, and Millennium Bank must obtain also approval from the European Commission and Portugal's Central Bank.

'This acquisition effectively backs reaching our strategic medium-term goal to be among the top 10 banks in Romania and, at the same time, it consolidates our position of stable provider of universal financial services. Millennium Bank is a solid financial institution, with activities focused on retail segment. I am convinced that the takeover of Millennium Bank Romania represents both a new stage in our development on the market in Romania, as well as consolidation of our position on the local market, especially in the retail segment,' said Laszlo Diosi, the CEO of OTP Bank Romania.

According to Diosi, the discussions on taking over Millennium Bank began in October 2013.

The OTP Bank's representative said the goal is reaching a market share of 5% on the market in Romania in the medium term, 5 to 10 years respectively.

'OTP Group is one of the most stable financial groups in the region, with excellent capitalization and liquidity. Our strategic objective is to increase our market share in the countries where we are present. Romania has always been an important market for us. Since we came to Romania, 10 years ago, we have grown organically. This strategic purchase fits perfectly in our expansion plan,' said Laszlo Wolf, the Deputy CEO of OTP Bank.

He also explained that the group does not aim at new takeovers on Romania's market before the completion of the integration of the taken over bank.

In turn, Luis Pereira Coutinho, a member on the executive board of Millennium bcp, said that the transaction is part of a restructuring plan.

With total assets of 2.83 billion lei (approximately 635 million euros) on December 31, 2013, Millennium Bank ranks 22nd among the banking institutions in Romania, with a market share of 0.8%. Following this acquisition, OTP Bank Romania estimates that it will increase its market share to 2.1% and will climb to the 11th place in the relevant rankings.

Millennium Bank Romania has a portfolio of almost 80,000 clients and a network of 56 branches, with a strategic concentration in Bucharest, and 58 ATMs. Following the transaction, OTP Bank Romania will have a portfolio of approximately 400,000 clients, some 150 branches and over 160 ATMs.