Zagrebačka Banka to Change Owners?

Total Croatia News

The largest Croatian bank could soon have new owners.

There have not been major ownership changes in the Croatian banking sector for almost a decade, but in the last few years there have been reports about possible changes. That things could soon change has been also hinted by rumours about the interest of the Hungarian OTP Bank for the purchase of Splitska Banka from Societe Generale, reports on October 1, 2016.

Although the majority of bankers believe that the talks between them are still in quite an early stage, unofficial information have recently appeared which make the whole story much more interesting. According to them, Societe Generale is at the same time thinking about acquiring Zagrebačka Banka. Insiders claim that the largest bank in Croatia has already been visited by foreign auditors which are supposed to make a preliminary analysis. Although this story is still far from being certain, it actually fits into the current developments in the European banking market, since the Italian Unicredit Group needs a large amount of fresh capital and is therefore aggressively selling its holdings. And, Unicredit is the owner of Zagrebačka Banka. Therefore, it would not be a surprise that Zagrebačka Banka could also be on the market.

At the same time, Societe Generale Group does not have any problems with its capital. And although it has recently sold its Georgian branch, its leadership recently suggested that the bank was ready for new expansion. The current market share they have through Splitska Banka apparently is smaller that they would like to have, and it is very difficult to significantly improve their market position with organic growth. This potential acquisition would financially be a relatively minor burden for Societe Generale, since Zagrebačka Banka would probably be valued at about 1.5 billion euros.

Societe Generale bought Splitska Banka for about one billion euros, after the expansion in Croatia forced Unicredit to sell it, according to a demand made by the Croatian National Bank at the time. However, it was a period when banks were sold at much higher prices than today.

In the aftermath of the financial crisis, Unicredit’s expansionary policies have made it vulnerable to credit risks. International media reports that the largest Italian banking group is trying to sell assets and issue new shares in order to raise as much as 16 billion euros. If it would manage to sell Zagrebačka Banka, the new CEO of Unicredit Jean-Pierre Mustier would be one step closer to fulfilling his goal. However, since the offer on the banking market is currently higher than the demand, the time will tell whether there will be any changes in ownership of Croatia’s major banks.


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