OTP Plans to Buy Credigen Bank - Report

By Margit Feher

BUDAPEST--OTP Bank Nyrt. (OTP.BU), Hungary's largest bank both by market share and assets, is planning to purchase Credigen Bank Zrt., owned indirectly by French bank Credit Agricole S.A. (ACA.FR), Hungarian online business news agency Portfolio said Tuesday, citing unnamed sources.

OTP Bank declined to immediately comment on the report.

OTP Chairman and Chief Executive Sandor Csanyi said at the annual meeting of the bank's shareholders April 26 that the bank was actively looking for acquisition targets, both in Hungary and abroad.

Credigen Bank, which is owned by Sofinco, a Credit Agricole Consumer Finance S.A. unit, has been operating since 1998. It ranks among the smallest banks in Hungary, with a shareholder equity of 3.9 billion forints ($17.2 million) at the end of 2011.

Sofinco decided in 2010 to exit Hungary. Budapest Bank Zrt., a unit of U.S. banking group GE Money Bank, bought most of Credigen's clients in December 2012.

OTP plans to develop Credigen into a credit institution specializing in lending to the agricultural sector, Portfolio said.

Credigen's book value, estimated by Portfolio at HUF2 billion, could be close to the bank's market value and the minimum capital requirement for establishing a bank. As a result, the acquisition may save OTP the administrative costs of founding a new bank, the news agency said.

OTP's liquid reserves totaled 6 billion euros ($7.7 billion) at the end of March.

Write to Margit Feher at [e-mail]