2023-10-30 18:09:36
Italian bank Intesa Sanpaolo said on Monday it had bought Romania’s First Bank from US private equity fund JC Flowers, a week following rival UniCredit also announced an acquisition in the Eastern European country .
As part of an asset management and insurance deal with Alpha Bank, which will see UniCredit buy the Greek state’s 9% stake in the lender, the Italian bank has also bought Alpha’s Romanian operations to merge them with its local unit.
The profitability of the Romanian banking system is higher than that of the eurozone, with a return on equity of 12.1%, the European Commission wrote in its national report in May.
“Given the strong fundamentals and positive growth prospects in the medium term, Romania continues to attract significant foreign direct investment flows,” she added.
Intesa did not give financial details of its operation, saying only that First Bank had 40 branches that served small and medium-sized businesses as well as individuals, with 1.5 billion euros in assets.
The investment will double Intesa’s presence in Romania, where its local unit has 60,000 customers and 34 agencies, with 1.5 billion euros in assets. Intesa Sanpaolo has been present in Romania since 1996.
Supported by an investment of 300 million euros, the merger of UniCredit Romania with Alpha Bank Romania will give birth to the third bank in the country, which represents 12% of total assets.
According to BNP Paribas analysts, Romania is expected to see the highest growth among Central European countries in 2023, although economic growth is currently slowing as the government seeks to bring the budget deficit and balance of payments deficit under control currents.
“In 2024 and 2025, the Romanian economy is expected to recover and gradually converge towards its potential growth estimated at around 3.5% in the medium term,” they wrote in a report published in July.
“Despite the size of the current account and budget deficits, Romania continues to attract foreign capital flows,” they added.
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