Hungary OTP Bank buys Montenegro's CKB
Hungary's leading bank OTP has bought 100% of Montenegro's Crnogorska komercijalna banka (CKB) today for EUR 105 million.Source: Portfolio.hu
The purchase price will be paid upon the final closing of the deal scheduled for end-2006.
The deal was preceded by comprehensive in-depth analyses and due diligence spanning several months, OTP said in a statement.
CKB was founded by 28 small and medium-sized companies as greenfield investment in 1997. The balance sheet total of the credit institution as at end-2005 amounted to EUR 303.3 million, translating into a 44% market share. The bank, with an original focus on the SME sector, provides a wide spectrum of services for both corporate and retail customers and is, unequivocally, a dominant market player in all business lines, OTP added.
The bank's equity, which has been increasing steadily, stood at EUR 19.3 million at end-2005. EUR 3.025 million was posted in after-tax profit in the 2005 fiscal year, which represented 54.6% growth.
The EUR 161.2 million customer loan portfolio increased by 87.4% in 2005 on a year earlier. An even more robust, 141.5% rise was experienced in its EUR 248.1 million customer deposit portfolio.
CKB services its approximately 150 thousand customers through a network of 33 units and via electronic channels.
Although the market leader Montenegrian bank is headquartered in Podgorica, approximately 25% of its loans and deposits are linked to the coastal region, which is of key importance, given that an increasingly dynamic tourism industry has come to play an important role in the country's economy.
In OTP Bank's opinion, “the purchase price is realistic, reasonable, value-proportionate and reflects both the current market value of Crnogorska komercijalna banka and the potential business value based on the anticipated development of Montenegro's economy."