Sberbank enters into Hungary
Sberbank can help the Russian companies' access to bank loans, expansion and realisation of Russian economic goals. The largest Russian bank enters into Hungary through acquisition of Volksbanken International AG.
25 January 2012
"They do have money if purchased and the bank must intend to do business here but will not make a mass of the market" - said an anonymous expert on bank transactions from a Hungarian consulting company after Russia's leading and one of the world's largest bank has recently received the license from the Hungarian Financial Supervisory Authority (HFSA), and it has finalised the acquisition of 98 percent stake in Volksbank Hungary.
The giant bank is owned by the Russian central bank and under the direct influence of Russian state. The bank's entry is most likely to have long-term consequences due to lack of knowledge of specific plans. Invest into Budapest is just a piece of cake to Sberbank, however, enter to EU has a real value. The Russian giant acquired 9-item portfolio in September last year from Volksbank International AG (beside hungarian, Bosnian, Czech, Croatian, Slovak, Slovenian, Serbian and Ukrainian Volksbank bought out). This is the first time in its history when entered into European Union with a headquarter in Vienna.
Flag set in Vienna
The bank got a European bridgehead although divided opinions about the roughly EUR600 millions taken Vienna's flag whether was expensive or not. However, Austrian center has a great importance to the bank with a global dream.
The Moscow-based Russian giant (see bank details below) can now follow two different strategies, according to experts. Or simply serve interested Russian companies in the region and use the acquisition to agressive market expansion. Also, the bank may try to open the way for the spectacular expansion of Russian companies.
It is a good time for the latter, because the Western European financial groups are busy with their problems: managing bad loan portforilio in many countries and European debt crisis. They are alos under pressure from problems of more strict capital requirements which would lead to drop in lending and restrain in expansion. In this environment, cash rich Russian bank's sister branches can push easily Russian companies that intend to explore the EU, and support them not only financing, realisation of Russian state goals but also "additional information"(market knowledge, contacts) as well.
- Russia and Eastern Europe's largest, Europe's third largest bank
(based on market capitalization)
- Founded In 1841 by Tsar Nicholas I
- 240 thousand people are employed
- 17 regional centers and over 20 thousand branches
- Nearly 30 percent market share in Russia
- Managing Half of Russians savings in Ruble
- Profit was 394 billions Rubles (about HUF3,000 billions) in 2011
- 76% increase in profit last year
- 60% owned by the Central Bank of Russia
- Owned by additional 263 thousand corporate and individual shareholders
- Bank loan portfolio is healthy: 5% bad loans a year ago 3.4% by the end of 2011
Hungary, however, does not expect big changes from change in ownership.The bank will focus on medium-sized companies on the local market in the future as Volksbank had done so far. Also, top management will not be changed immediately, and it is low chance to rename Volksbank to Sberbank in Hungary.
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