According to an interview with Andreas Treichl, the CEO of Erste Bank, stated that as bank is considered to be one of the possible acquisition targets due to its exposure to the emerging Europe, an offer that he could not refuse would have to price in bank's growth prospects.
Moreover, the CEO stated that the bank’s main focus is currently on Romanian market with BCR, which acquisition has been recently finished. Andreas Treichl has also stated that Erste Bank at present has no expansion plans, but he added that acquisitions in Russia or Turkey may come up in the future.
Our view: This came as a response to market speculations that Citibank, which is looking to buy into emerging markets around the world, may be interested in Erste Bank. We expect that going forward such M&A speculations would increase. However, current shareholders structure (with Erste oesterreichische Spar-Casse Privatstiftung, a charity that holds 30 % stake in Erste Bank) could create some legal issues for a possible bidder.
While, talking on the expansion plans of Erste Bank, the CEO reiterated its view that the bank’s main focus is on integration of BCR into group’s structure and there are no immediate plans of entering Russia or Turkey. We do not expect a significant trading impact from the news today.