French investment bank Societe Generale has agreed to sell its 87.85% stake in its Moldavian subsidiary Mobiasbanca Societe Generale to Hungarian banking major OTP Bank for an undisclosed price.
Image: OTP Bank to acquire 87.85% stake in Mobiasbanca Societe Generale. Photo: courtesy of Societe Generale / Mobiasbanca – Groupe .
Apart from Societe Generale, the European Bank for Reconstruction and Development (EBRD) holds a 8.84% stake in the Moldavian commercial bank with the remaining stake of 3.31% held by minority shareholders.
Originally, Societe Generale acquired a stake of 95.35% in the Moldavian bank in 2007.
According to OTP Bank, Mobiasbanca Societe Generale has a market share of 13.3%, which makes it the fourth largest bank in Moldova. Established in 1990, the Societe Generale’s subsidiary, which operates as a universal bank, has been active across retail and corporate segments.
The French investment bank expects the transaction to have a positive impact on its CET1 ratio of nearly 1 basis point and to bring down its risk weighted assets by about €400m.
The banking company further said that the sale will have an impact of nearly -€28m on its fourth quarter 2018 earnings primarily because of goodwill impairment.
Societe Generale Group deputy CEO Philippe Heim said: “Through the sale of Mobiasbanca, Societe Generale takes a further step in its” Transform to Grow” strategic plan by optimising capital and refocusing its international Retail banking activities on geographies where it has a critical size and high potential synergetic activities.
“We’re pleased to announce the signature of the cooperation agreement with OTP, which will allow us to provide mutual services to our corporate clients in the region”.
The transaction is expected to be closed in the coming months depending on receipt of all the required regulatory approvals.
Apart from the Moldavian transaction, Societe Generale and OTP Bank entered into a co-operation agreement mainly to support the service of global companies in important areas like international cash management and capital markets services, structured finance and investment banking services.
In December 2018, the French investment bank entered into a deal to sell its Serbian banking subsidiary Societe Generale Serbia (SGS) to OTP Bank for an undisclosed price.