Hungary’s OTP Bank has agreed to buy Splitska Banka (SGSB), the Croatian subsidiary of Societe Generale that also offers private banking services, for an undisclosed sum.
Societe Generale said that its strategy for central and eastern Europe would be to focus on markets where it can be placed among the Tier one banks and contribute materially to regional returns.
“The combination of SGSB and group OTP bank operations in Croatia will enable the creation of a more significant sized banking player in the country with a greater potential for development,” Societe Generale said.
The French banking group said that the deal will reduce’s its fourth-quarter earnings by nearly €240m, and on completion will boost its core equity tier 1 capital ratio by 8.5 basis points.
In a separate statement, OTP said the deal would increase its market share in Croatia to about 10%.
The transaction is anticipated to be wrapped up in mid-2017, and the integration process expected to be concluded by mid-2018.