Acquisition boosts local Raiffeisen customer-base to almost 300,000.Retail operations will significantly gain momentum. Purchase price of130 million euros reflects Price to Book-value multiple of 3.1. Mergerplanned by 2008.
Raiffeisen International Bank-Holding AG, the CEE-operations of the RZBGroup, has closed the acquisition of eBanka, a.s. in the Czech Republicyesterday. All necessary approvals from the Czech National Bank as wellas other relevant authorities in the Czech Republic and in Austria havebeen obtained. The purchase price for 100 per cent of eBanka''s equityamounts to 130 million euros. The book value of eBanka of 42 millioneuros reflects a Price to Book-value multiple of 3.1.
eBanka started operations in 1998 and is predominantly focused on retailbanking. It was sold by Ceska pojistovna, the largest Czech insurancecompany. Ceska pojistovna is a member of the PPF Group, a leadingdiversified financial group in the Czech Republic and CEE region withmanaged assets exceeding USD 10 billion as of year-end 2005. eBanka’s total assets amounted to 630 million euros and the bank employed a staff of 925 at the end of June 2006. At the same time, the assets of Raiffeisenbank a.s. amounted to 2.79 billion euros, the bank had 50 branches and employed a staff of 1,173. Raiffeisenbank has been operating as a universal bank in the Czech Republic since 1993.
With this acquisition, Raiffeisen International boosts its retailcustomer base by over 70 per cent to almost 300,000 clients in the CzechRepublic. The combined market share in terms of total assets (based on2005 figures) is 3.3 per cent. Together, both banks rank sixth on thelocal market.
Acquisition supports growth strategy in robust Czech banking market
"With eBanka, our retail banking operations will gain significantmomentum in the Czech Republic. It is our aim to extend our customerbase to 400,000 by the end of 2009 and reach 10 per cent market share inselected product segments," said Herbert Stepic, CEO of RaiffeisenInternational, at a press conference in Prague."This deal is also asign that the Central European region is of great importance to us andwe are willing to invest significantly also in this region of EmergingEurope,” he added.
The Czech banking market is in a robust condition with an asset growthof 15.9 per cent in 2005. With an increase of 40.7 per cent in 2005,loans to private individuals were one of the main growth drivers. Still,the overall level of credits to households accounted for only 12.7 percent of the Czech GDP. The average of the new EU-member states is 14.4per cent.
"We still see significant long-term growth potential especially on thelending side. Together with eBanka, we will be in a much better positionto grow stronger than the market," Stepic added. According to RaiffeisenResearch, credits to households are expected to grow by 19 per cent peryear on average until 2010.
"With around 300,000 customers, we now have reached a critical mass inour customer base that will allow us to develop and introduce newproducts and services even more efficiently and exploit economies ofscale using all available distribution channels," Stepic said.
eBanka and Raiffeisenbank are the Top 2 internet banks in the CzechRepublic according to a recent client survey published this month byfincentrum.cz. Both banks also enjoy very high customer satisfactionrates. According to a survey conducted by market researcher TNS Aisa, 90per cent of eBanka customers and 84 per cent of Raiffeisenbank customersare extremely or well satisfied with their service.
Merger planned by 2008
"We expect to complete the legal and operational merger of both banks by2008," Stepic said. In the meantime, the focus will be on achievingquick wins for the customers of both banks such as cross-offering ofproducts, free access to the both ATM networks and cash services atbranches. Furthermore, it is planned to quickly integrate the riskmanagement functions and treasury management of both banks applyingRaiffeisen group standards.
Raiffeisen International is the majority-owner of Raiffeisenbank with a51 per cent stake. The remaining 49 per cent is owned byRaiffeisenlandesbank Oberosterreich (25 per cent) andRaiffeisenlandesbank Niederosterreich-Wien (24 per cent). This ownershipstructure is set to remain in place also after the planned merger of thetwo banks.
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Raiffeisen International operates one of the leading banking networks inCEE with subsidiary banks and leasing companies in 16 markets. More than11 million customers are attended to through more than 2,700 businessoutlets. In eight markets, the respective Network Bank ranks among thethree largest local banks. Representative offices in Lithuania andMoldova complement the Group''s presence in the region. RaiffeisenInternational is a fully consolidated subsidiary of RaiffeisenZentralbank Osterreich AG (RZB), which owns 70 per cent of the commonstock. The remaining 30 per cent is free float; the shares are traded onthe Vienna Stock Exchange. RZB is a leading corporate and investmentbank in Austria and the central institution of the Austrian RaiffeisenBanking Group, the country''s largest banking group.
Raiffeisen International''s balance-sheet total amounted to€ 46.3 billion at the end of the first semester 2006 (plus 14 per cent compared with year-end 2005). Consolidated profit (after minorities) increased by 56 per cent to € 289 million, compared with the first semester 2005.
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