Bank Millennium, a Polish commercial bank, has agreed to acquire 99.79% stake of Euro Bank from Societe Generale (SocGen) for a reference price of PLN1.83bn ($484m).
Euro Bank is the retail banking subsidiary in Poland of SocGen. The final price for its acquisition will be adjusted by variation of net asset value of the Polish retail bank at closing of the deal.
Bank Millennium said that the acquisition of Euro Bank aligns with its strategy for the years 2018-2020 and is expected to contribute to achieving the return on equity (ROE) ratio at the level of the best three banks in Poland.
Further the combination of the two Polish banks is believed to result in a much bigger and more competitive bank.
Bank Millennium claims that the combined company will hold the seventh place on the market based on value of assets, deposits and loans along with a particularly strong position in consumer lending.
The acquisition of Euro Bank will add 1.4 million new customers to Bank Millennium, enabling the latter to achieve sixth position for the number of retail customers in Poland. It is also expected to increase the geographical coverage by boosting the enlarged bank’s footprint in smaller towns.
Bank Millennium chairman and CEO Joao Bras Jorge said: “We have a lot in common and complement each other well – not only in geographic terms. The most important element is the complementary activity profile.
“Bank Millennium is a universal bank, while Euro Bank is an expert in offering consumer loans. This is important, because by 2020 we wish to increase by 40% the sale of cash loans, especially those directed to new customers.”
For SocGen, the completion of the deal will reduce its risk weighted assets of €2bn. The deal includes specific risk sharing arrangements with regard to the Swiss Franc-denominated mortgage loan portfolio of Euro Bank.
Societe Generale said that through its global banking and investor solutions business, it will continue to provide corporate and investment banking services in Poland.
Societe Generale Group deputy CEO Philippe Heim said: “The sale of Euro Bank is a further step in the execution of Societe Generale’s Strategic and Financial plan “Transform to Grow”, whose primary objectives are to focus and develop its presence on markets and activities with a critical size and the potential for generating synergies with other Group businesses.”
Subject to receipt of required agreements and approvals, the merger of Bank Millennium and Euro Bank is expected to be completed in the second half of 2019.