The Slovenia Times

Hungary's OTP cleared to take over NKBM bank

The NKBM headquarters.
Photo: Daniel Novakovič/STA
File photo

The Hungarian banking group OTP has received clearance from the Slovenian market regulator to take over NKBM, Slovenia's second largest bank, and create what it says will be the largest bank in the country.

The clearance from the Slovenian Competition Protection Agency (AVK) was the final nod of approval required after the transaction had been okayed by the European Central Bank in September 2022.

OTP signed a deal to acquire the Maribor-based bank from the US fund Apollo (80%) and the EBRD (20%) on 31 May 2021. Media have valued the deal at roughly one billion euros.

In announcing the AVK's clearance on 1 February, OTP said the transaction was expected to be finalised in the coming days.

OTP will then merge NKBM with SKB, another Slovenian bank which it acquired in 2019, to create what it says will be the largest bank in the country by volume of loans and deposits.

In addition to stable and profitable operations, "the OTP Group aims to contribute to the development of the Slovenian economy by all possible means", it said in a written statement.

It promised to offer "state-of-the-art, fast and convenient financial services, both in the branch network and through advanced digital channels".

OTP plans to focus on developing fast credit products under realistic terms for SMEs, and to support both SMEs and large local businesses in their foray and expansion in foreign markets through "mutually beneficial partnerships".

OTP notified AVK of concentration on 1 July 2021 and had initially expected to close the transaction by the end of June 2022 but regulatory procedures drew out the process.

Media speculated about the European Central Bank's misgivings following Russia's invasion of Ukraine. OTP has considerable exposure to the two countries, which has had a negative impact on its bottom line.

Meanwhile, the Slovenian market regulator is reported to have sought additional documents and explanations over concerns about the impact of the acquisition on competition in the banking market.

This is because after the merger between NKBM and SKB there will be two nearly equally strong players in the market, the other being NLB, now Slovenia's leading bank.

Apollo and the European Bank for Reconstruction and Development (EBRD) bought NKBM in mid-2016 for €250 million after Slovenia bailed out its banks with billions of euros during the 2013-2014 financial crisis. In exchange for the state aid, Slovenia committed to privatise the banks.

NKBM bought another Slovenian bank, Abanka, in mid-2019, when OTP was one of prospective buyers.

According to the newspaper Finance, Apollo and the EBRD earned almost €220 million in dividends as NKBM owners.

OTP also has a stake in real estate development in Slovenia. It has acquired the commercial part of the project of the new Ljubljana passenger terminal known as Emonika through the company Mendota Invest.

The Hungarian bank says the plans for Emonika have been submitted to the Ministry of Natural Resources ans Spatial Planning for approval. It plans to build a hotel, apartments, offices and a shopping centre of approximately 85,000 square metres of gross leasable area.


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