Austrian banking group Raiffeisen Bank International is close to an agreement to acquire the Romanian subsidiary of Spanish bank BBVA, Garanti BBVA Romania, according to people close to the discussions cited by Bloomberg. Garanti BBVA Romania is the local subsidiary of the BBVA-held Turkish financial group Garanti.

According to Bloomberg, the Austrian bank would have offered about 1.2 times Garanti's book value, which would imply a price of about EUR 550 million, based on data from last year's balance sheet. 

The talks are advanced, but could suffer delays or even fail, said the sources, who asked not to be identified because the negotiations are confidential. 

Representatives of BBVA and Raiffeisen declined to comment.

The Romanian banking market has undergone a series of transactions in recent years, which have contributed to the consolidation of the sector. As a result of these operations, Banca Transilvania has become the largest bank in Romania. The local banking system generated a cumulative profit of approximately RON 16 billion (EUR 3.2 billion) last year, supported by some of the highest interest rates in Europe.

Raiffeisen Bank International's CEO, Johann Strobl, who is at the end of his term, stated in January that the bank has additional capital for possible acquisitions and that it is interested in transaction opportunities in Romania, without naming a target.

A possible transaction would bring a boost to the Austrian group, affected in recent years by failed attempts to sell its Russian operations and losses of around EUR 2 billion related to litigation over foreign currency loan contracts in its former division in Poland.

iulian@romania-insider.com

(Photo source: Garanti BBVA Romania)