The country’s biggest financial institution, OTP, wants to buy two banks, both of which are planning to withdraw from Hungary, CEO Sándor Csányi told news radio Inforádió on Monday. In one case negotiations are in the final stage and OTP has made an official written offer.
Csányi said OTP also plans to make certain investments in Vietnam or China and it is “possible that we will not purchase but establish a bank with special products”.
He emphasised that OTP has two criteria when purchasing. “We would have to become majority owners and we will not make the mistake of purchasing a bank with a small market share. I think that we would be able to pay for a Vietnamese bank with an eight to ten per cent market share.”
Regarding the Hungarian situation Csányi noted that negotiations could come to an end in three to four months. According to an analysis by financial news portal portfolio.hu, OTP’s targets will likely be smaller players on the national market or divisions of a larger bank such as CIB, MKB or Raiffeisen. Portfolio said the entire purchase of a similar sized bank would still be too big for OTP.
The bank is in a good situation to launch a purchase, especially because its Q1 figures were better than expected when announced on Tuesday. OTP recorded an after-tax profit of HUF 11.23 billion (EUR 38.67 million). Although the figure is 12 per cent lower than in the same period of 2012, it was still better than most analysts expected. Due to the bank tax a somewhat better indicator is perhaps OTP’s pre-tax profit, which rose 13 per cent to HUF 57.96 billion (EUR 199.58 million).
Two other important Hungarian companies published their results this week. Oil corporate MOL recorded a HUF 32.3 billion (EUR 111.24 million) after-tax profit in the first quarter of 2013, which is a year-on-year decline of 56 per cent, the company announced on the Budapest Stock Exchange website. “As expected 2013 has been a challenging year to date,” MOL CEO Zsolt Hernádi said. “Slow economic growth, continuous pressure on motor fuel demand and tight regulatory environment remained the key external challenges.”
Drug maker Egis recorded a HUF 14.16 billion (EUR 48.55 million) after-tax profit in the first six months of its business year, which began last October, the company said. Though revenue only increased 2.9 per cent, the year-on-year net profit rose 20.2 per cent. Egis did not change its full-year projection and still expects four to six per cent revenue growth, which will be the result of a five to ten per cent decline in the Hungarian market and an eight to 12 per cent increase in the Commonwealth of Independent States.