Local daily Ziarul Financiar, citing Greek press, has reported that National Bank of Greece, with EUR 1bn for acquisitions, should set Banca Transilvania as its main target in the region. Also according to Greek media, Marfin Investment Group is in talks to take over the bank. There has been no comment from Banca Transilvania on the story.
Our view:
Banca Transilvania is an obvious target for a takeover (as the largest remaining locally owned bank in Romania) and there has been much speculation over potential buyers in recent months and years. Rumours are likely to support the stock price in the short-term but a transaction is unlikely to be agreed in the near future. Although the profitability of the bank has been under pressure from sharply deteriorating asset quality and a margin squeeze, we expect the owners, mainly local entrepreneurs with some 25% (of which 5% in the hands of chairman Horia Ciorcila), to hold out for more attractive pricing than they are likely to receive in the current environment.