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01.03.2005

Hebros Bank joined BA-CA Group

  • Bank Austria Creditanstaly acquires 90% of Hebros Bank, while 10% being acquired by HVB Bank Biochim (rounded percentages);
  • HVB Bank Biochim and Hebros Bank hold 10% market share in Bulgaria; joint assets of the two Bulgarian banks put them at strong 3rd place in the country with combined assets of BGN 2.6 billion (1.3 billion euro);
  • Strong joint position with around 220 branches, 2500 employees serving more than 600,000 customers in Bulgaria;
  • 26 mln. euro subordinated loan from BA-CA strengthens the capital base

Bank Austria Creditanstalt, which is responsible for the markets in Central and Eastern Europe within HVB Group, and its Bulgarian subsidiary HVB Bank Biochim have finalized today the acquisition of Hebros Bank. The sellers of the 99.9% interest are SWC BV and SWR Investments, independent investment companies. The agreement already signed on 3rd November 2004, enters into effect today. Details of the purchase price have not been disclosed. "The purchase price is slightly higher than twice the book value and is in line with the strategic importance of the acquisition. The strong joint position of the two Bulgarian banks increases to the level of 10.3 per cent which puts them at 3rd place in Bulgaria among banks", says Peter Harold, CEO and Chairman of the Management Board of HVB Bank Biochim and designated CEO and Chairman of the MB of Hebros Bank.

CA IB, BA-CA's investment banking arm, and the Austrian law firm Wolf Theiss as well as Ernst & Young Bulgaria and Djingov, Gouginski, Kyutchukov & Velichkov acted as adviser to BA-CA and HVB Bank Biochim on this acquisition.

Strong joint position
HVB Bank Biochim and Hebros Bank hold an excellent position in the Bulgarian banking market. Together they have about 2500 employees that serve more than 600,000 clients in about 220 branches. "This acquisition will further develop the Bulgarian financial market. Now substantially more Bulgarian customers will be able to take advantage of the international expertise and the local strength of our banking Group", says Peter Harold.

With combined total assets of about BGN 2.6 billion (1.3 billion euro; as of end 2004 according to unaudited banks reports, issued from BNB), HVB Bank Biochim and Hebros Bank become a strong number 3 among banks in Bulgaria. Jointly they are especially well-positioned in the lending business: their combined market share of 11.4% makes them Bulgaria's second-largest lender. The two banks are a very close second in the area of business loans, with a combined market share of 11.2 per cent. They rank third in the retail lending sector (consumer loans and mortgage loans), with a combined market share of 10.6 per cent. In the deposits of clients business the two banks are the number 4, with a market share of 8.3 per cent.

"The two banks are highly complementary to each other. We have the opportunity to adopt the best practices of both of them in order to strengthen further our position in Bulgaria, which is a core market for BA-CA", says Peter Harold.

Preparation for integration fully on track
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. It is planned to integrate HVB Bank Biochim and Hebros Bank in 2006.  "We will now quickly start an integration project to examine in detail the possible ways in which the integration can proceed. We will have a transparent, fair process. As soon as decisions are taken, we will communicate them", says Peter Harold.

After careful analysis strategic decisions will be made as for operational structure, management responsibilities, joint IT platform, brand name, etc. A leading consulting company will be selected to facilitate the process. In order to strengthen their capital base HVB Bank Biochim and Hebros Bank have received subordinated loans from BA-CA at total amount of 26 mln. euro

During the integration the two banks will operate in parallel. "Our joint activities during the integration and the professional cooperation of both banks will pave a path to a possible legal merger, which is the most preferred scenario. We will chose the most suitable option for our clients and business", says Peter Harold.

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 4.3 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. BA-CA received numerous awards in Bulgaria as Investor of the Year for the Biochim deal. 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

HVB Bank Biochim, PR Officer
Viktoria Blajeva, tel. +359 2 9269 164; e-mail: viki.davidova@biochim.com

Hebros Bank, PR Manager
Iliana Zaharieva, tel. +359  9264 819; e-mail: iliana.zaharieva@hebros.bg