Bank Austria Creditanstalt acquires Hebros Bank in Bulgaria

  • Takeover of the tenth-largest Bulgarian bank with 92 offices and 210,000 customers
  • Bank Austria Creditanstalt holds a market share of 10 per cent in Bulgaria

On 3 November, Bank Austria Creditanstalt (BA-CA) signed the agreement to purchase Hebros Bank, a bank in Bulgaria. The sellers of the 99.9 per cent interest are SWC BV and SWR Investments, independent investment management companies. "By acquiring Hebros Bank we have significantly strengthened our market position in Bulgaria. We are thereby increasing our market share to the level of 10 per cent that we have sought in this strategic core market,“ says Erich Hampel, CEO of Bank Austria Creditanstalt. The acquisition is subject to approval by all relevant authorities.   

Hebros Bank has total assets of EUR 291 million (as at 30 June 2004) and a market share of 2.9 per cent, which makes it the number 10 in the Bulgarian banking market. With a country-wide network of 92 offices and a total of 1,000 employees, the bank serves 210,000 customers. The bank was created through the merger of eight state-owned banks in 1993.

In 2000, it was sold to the Regent Pacific Group. The bank has been restructured and modernised over the past four years. Today, Hebros Bank uses a modern IT system and operates an extensive network of branches. The bank focuses on retail customers and small and medium-sized businesses.

BA-CA is already active in Bulgaria through its subsidiary HVB Bank Biochim. HVB Bank Biochim is currently the fourth-largest local bank, with total assets of EUR 793 million, some 1,500 employees, 151 branches and more than 400,000 customers. It is planned to integrate HVB Bank Biochim and Hebros Bank in 2006.  

Strong joint position
HVB Bank Biochim and Hebros Bank hold an excellent position in the Bulgarian banking market. Together they serve over 600,000 customers. With combined total assets of about EUR 1 billion, they are a strong number 4 among banks in Bulgaria. The two banks are well positioned especially in the lending business: their combined market share of 11.6 per cent makes them Bulgaria's second-largest lender. The two banks are the market leader in the area of business loans, with a combined market share of 11.2 per cent. They rank third in the retail lending sector, with a combined market share of 12.6 per cent. In the deposits business the two banks are the number 4, with a market share of 9.7 per cent. "The two banks fit together perfectly," says BA-CA's CEO Erich Hampel. "This acquisition provides a strong base for our further growth in Bulgaria."

Details of the purchase price have not been disclosed. "The purchase price is slightly higher than twice book value and is in line with the strategic importance of the acquisition," says BA-CA’s CEO Hampel. "We expect significant synergies and an increase in the combined unit's ROE by 2007," Hampel adds.

BA-CA acquires 90 per cent of the shares in Hebros Bank, with the remaining 10 per cent being acquired by HVB Bank Biochim, BA-CA‘s subsidiary in Bulgaria. HVB Bank Biochim's directly held equity interest in Hebros Bank ensures a direct link and close cooperation between BA-CA's two Bulgarian banking subsidiaries from the very start. The remaining 0.1 per cent is held by minority shareholders. CA IB, BA-CA's investment banking arm, and the Austrian law firm Wolf Theiss as well as Ernst & Young Bulgaria acted as adviser to BA-CA on this acquisition.

Within HVB Group, Bank Austria Creditanstalt is responsible for business in the markets of Central and Eastern Europe (CEE). The bank operates the leading network in the region, serving 4.1 million customers in 11 countries. BA-CA has won numerous awards in recognition of its CEE competence: most recently, in summer 2004, "Euromoney" and "The Banker" named Bank Austria Creditanstalt "Best Bank in CEE" and "Bank of the Year in CEE", respectively. The Group has maintained a presence in Bulgaria since 1986. In 2002, Bank Austria Creditanstalt acquired the Bulgarian Bank Biochim. In 2003, "The Banker" named HVB Bank Biochim "Bank of the Year" in Bulgaria.

Enquiries: Bank Austria Creditanstalt International Press Relations
Ildiko Füredi-Kolarik, tel. +43 (0)5 05 05 56102; e-mail: ildiko.fueredi@ba-ca.com