(Reuters) - Eurobank (EURBr.AT) is in talks with Banca Transilvania ROTLV.BX to sell its subsidiaries in Romania as part of a restructuring plan agreed by Greece’s third largest lender with European Union authorities.
The sale would close a decade-long chapter of ambitions by Eurobank and other Greek lenders to spread their wings abroad after the country’s debt crisis forced them to retreat.
Eurobank, which has operations in Romania, Bulgaria, Serbia and Cyprus, needs to shrink its non-Greek assets to 8.7 billion euros (7.73 billion pounds) next year from about 11.2 billion currently, based on commitments agreed with European competition authorities.
The bank said the potential sale will include Romanian units Bancpost, ERB Retail Services IFN and ERB Leasing IFN.
“The details as regards the negotiations will be published after finalizing necessary steps and obtaining relevant approvals. Finalisation of the negotiations is expected at the end of October,” Eurobank said.
HSBC and Mediobanca are Eurobank’s advisers on the sale.
Fully-owned Bancpost has total assets of about 3.1 billion euros and a network of 148 branches, employing 2,255 people.
“We are in talks with Banca Transilvania on a full or partial sale,” a Eurobank official told Reuters, declining to be named.
Eurobank, 2.4 percent owned by Greece’s bank rescue fund HFSF, concluded the sale of its Ukrainian unit Universal Bank last year, in line with a restructuring plan agreed with the European Commission.
“The sale will certainly conclude our commitments to the EU’s DG Competition in the context of our restructuring plan,” the official said.
Based on Eurobank’s strategic plan, the lender intends to maintain its operations in other foreign markets such as Bulgaria and Cyprus.
“Our goal is to further strengthen and expand our presence there,” the official said.
“We have the room to do so given that our commitment to EU competition authorities was to reduce our foreign exposure below a certain level. The Romanian sale will bring us below that level.”
Greek banks have been slimming down by divesting assets and foreign subsidiaries to focus on banking at home, with proceeds boosting capital ratios and liquidity.
Peer National Bank (NBG) (NBGr.AT) last month agreed to sell its wholly-owned Serbian operations - Vojvodjanska Banka, NBG Leasing and a portfolio of Serbian-risk corporate loans - to OTP Serbia, a subsidiary of Hungary’s OTP Bank OTPB.BU.
In July NBG also agreed to sale its Romanian unit Banca Romeneasca to OTP Bank.
Reporting by George Georgiopoulos; Editing by Keith Weir