OTP Bank is to acquire the Uzbek Ipoteka Bank; the contract for the acquisition was signed by the two parties on Monday. Ipoteka Bank is currently owned by the Uzbek Ministry of Finance.
Leading Hungarian bank OTP will acquire 100 percent of the shares owned by the Ministry of Finance (nearly 97 percent of the total stake) in two stages: 75 percent of the shares now and the remaining 25 percent three years after the financial close of the first transaction. The financial closing of the first transaction is expected to take place in the first half of 2023.
OTP has been in talks with the Uzbek government since the end of 2020 regarding the possibility of participating in the privatization of the country’s banking system, which is a goal for the Uzbek leadership.
The sale and purchase agreement between the two parties was ready months ago, but the Ukrainian-Russian war intervened and the deal has been delayed until now. However, the acquisition was already discussed by Prime Minister Viktor Orbán when he visited Uzbekistan, a country of 35 million, in November. At that time, he had said that OTP was close to buying the Uzbek bank.
As the fifth largest bank in Uzbekistan in terms of total assets, Ipoteka Bank has more than 1.6 million retail customers, 39 branches operating as regional centers, 193 customer contact points and a significant corporate client base. The financial institution has two smaller subsidiaries: Ipoteka Leasing, a financial leasing company, and Imkonsugurta, an insurance company, which are also part of the transaction.
At the press conference following the signing, Sándor Csányi, CEO and President of OTP, said that their participation in the privatization of the Uzbek banking system was a great opportunity.
In the long run, OTP Group aims to become a dominant player in the Uzbek banking market.
He added that the reforms initiated in Uzbekistan offer a great opportunity to open a new chapter in the history of OTP Bank.
Deputy Prime Minister, and Minister of Investment and Foreign Trade Jamshid Khodjaev, said that OTP was a strategic partner and that the sale and purchase agreement was in line with Uzbekistan’s strategic initiatives to gradually privatize large state banks by strategic investors, in line with the relevant presidential decree. The arrival of a large foreign bank such as OTP Bank on the local market will contribute to increasing competition, improving the quality of corporate governance and the quality of banking services, he said.
The OTP Group provides universal financial services to approximately 16 million customers with nearly 36,000 employees in 11 countries. Since the early 2000s, it has acquired and integrated 23 banks. The bank is currently a market leader not only in Hungary but also in Bulgaria, Serbia, and Montenegro, and by the end of the year, it can be one of the largest actors of the banking sector in Slovenia as well.
Featured photo via Facebook/OTP Bank