Bank Austria Creditanstalt is to merge its Romanian bank, HVB Bank Romania, with Banca Tiriac, the eleventh largest bank in Romania.
The merged banks, which will be known as HVB Tiriac, become the fourth-largest bank in the country, with 72 offices and nearly 720,000 customers. HVB Tiriac will enjoy a 7.5 per cent market share. Romania’s eleventh-largest bank headquartered in Bucharest.
“Romania is the strategic focus of our bank,” says Erich Hampel, Chief Executive Officer of BA-CA. “We thus keep our promise of strengthening our presence in this country at an early stage of its convergence with Europe. This gives us a significant lead over our direct competitors.”
Both banks are profitable, and Hempel says the plan is to increase their combined market share beyond 10 per cent as swiftly as possible. “We are proud of including the name Tiriac in our logo,” he adds. “The name Tiriac is associated with success and dynamic growth, not only in Romania but also in the rest of the world.”
Bank Austria Creditanstalt (BA-CA) will hold over 50 per cent of the shares in HVB Tiriac and will have full responsibility for controlling the business of HVB Tiriac. “The two banks fit together perfectly,” says Ion Tiriac. “With this merger, we are able to further benefit from the dynamic Romanian financial market development. I was reluctant to sell Banca Tiriac but am very excited with the project of merging with HVB Bank Romania. I am very proud of the achievements accomplished by the management and the 1,100 employees of the bank which bears my name. Alongside with our 685,000 customers, they are the real value of Banca Tiriac.”
BA-CA has been active in Romania since 1998 through its subsidiary HVB Bank Romania. HVB Bank Romania is currently the seventh-largest local bank, with total assets of about Euros 1.4 billion, 320 employees, 12 branches and some 32,000 customers. “Our colleagues in Romania have built up an excellent bank within a few years,” says Hempel. “Today, HVB Bank Romania is the most profitable unit in our network. I am proud of these outstanding achievements. The merger of the two banks ideally combines HVB Bank Romania’s strengths in corporate business, treasury operations and private banking with Banca Tiriac’s strong presence in classic retail business.”
Banca Tiriac has a nationwide network of 60 offices, total assets of Euros 706 million (as at 31 March 2005) and a market share of 2.9 per cent, which makes it number 11 in the Romanian banking market. The bank was created in 1991.
With combined total assets of about Euros 2,080 million and 72 branches, HVB Bank Romania and Banca Tiriac will become number 4 among banks in Romania, ranking after BCR (26.1% market share1), BRD (13.0%), Raiffeisen Bank Romania (9.2%), and ahead of CEC (5.9%).
“The merger with Banca Tiriac provides a strong base for our further growth in Romania,” says Hempel. “Our market position will also lead to significantly higher revenues and even stronger growth than we would have been able to achieve on our own. Today we expect that we will be able to more than double the results in Romania compared with the current levels.”
The merger is expected to take place before the end of this year and is subject to approval by all relevant authorities.