PARIS/BUDAPEST (Reuters) - Societe Generale has agreed to sell its Moldovan unit to Hungary’s OTP Bank, as the French bank continues its retreat from parts of eastern Europe while OTP gradually increases its presence in the region.
SocGen holds a 87.85 percent stake in Mobiasbanca Societe Generale, the fourth biggest lender in the country with a 13 percent market share, and expects to close the transaction in the coming months, the two banks said.
SocGen did not disclose the amount of the transaction, although it said the sale would have a 28 million euro (£24.6 million) negative effect on its fourth-quarter earnings. The amount was already included in the 240 million exceptional charge announced on Jan. 17.
The transaction will lift SocGen’s core equity tier one ratio by 1 basis point, the bank said.
In recent years, the French bank had already agreed to sell its banks in Croatia, Albania, Bulgaria and Serbia to OTP, which is expanding its footprint in eastern Europe and as a result topped 1 billion euros in profit for the first time in 2017.
SocGen has said it intends to rejig its footprint by exiting from countries or businesses where it lacks critical size, while consolidating in areas where it is already strong.
The two banks have also signed a cooperation agreement to serve international corporate clients in cash management, capital markets services, structured finance and investment banking services, OTP Bank said.
Hungary is already covered by the co-operation agreement, with Bulgaria and Croatia joining shortly, OTP said. Albania, Serbia and Moldova will be added once the takeover of the SocGen businesses is completed in those countries.
Reporting by Inti Landauro and Marton Dunai; Editing by Sudip Kar-Gupta and Jan Harvey