Commerzbank and Erste Group have also signed a cooperation agreement for associated corporate customers in select European countries
Germany-based Commerzbank has agreed to divest its Hungarian subsidiary to Budapest-based Erste Bank for an undisclosed sum.
Under the terms of the agreement, Erste will fully acquire Commerzbank’s Hungarian unit, including its customer portfolio and its head office building in Budapest.
In addition to the sale, the German lender has also reached a cooperation agreement with Erste Bank Hungary, a member of Vienna-based Erste Group.
Under the cooperation agreement, Erste Group will provide Commerzbank’s corporate clients with access to its network in select Central and Southeast European markets.
The agreement is said to further strengthen Erste’s offering for German-speaking corporates not only in Hungary, but also in most of the region’s other markets.
The transaction is expected to close in the second half of 2022, subject to the approval of the antitrust and banking supervisory authorities.
After closing, Commerzbank will continue its operations in Eastern Europe with locations in Poland, the Czech Republic, and Russia.
Commerzbank board of managing directors chairman Manfred Knof said: “We are consistently aligning our international network with the needs of our core customers and are focussing on international businesses with reference to Germany.
“We will continue to be the strong international banking partner in the most important trade corridors of the German economy but will need fewer own locations than before.”
The Hungarian subsidiary of Commerzbank has been offering a wide range of products for corporate clients, for almost 30 years in the market.
It serves SMEs and large customers in Hungary with around 100 employees, in addition to global customers, with a focus on credit and trade finance and currency business.
Commerzbank said that the sale is part of its ‘Strategy 2024’ announced in February this year, which focuses on adjusting its operations abroad.
The bank aims to exit from 15 foreign locations by 2024 and reduce its network of international correspondent banks from around 1,600 to around 1,300.
Erste Bank Hungary covers wide-ranging financial services and is ranked among the top three banks in Hungary, in terms of the number of customers, branches, and ATMs.
Erste Group CEO Bernd Spalt said: “This acquisition is an important step for our corporate business in Hungary and perfectly complements our existing customer base in this segment.
“In addition, it will allow our clients to benefit from the excellent product knowledge, especially in fields of cash management and trade finance, that Commerzbank’s strong track record in Hungary ensures.
“Coming on the back of our purchase of the Hungarian online broker Random Capital earlier this year, this newest acquisition marks a further step in our pursuit of a targeted growth strategy in Central and Eastern Europe.”