As expected, Erste Bank has completed the acquisition of 100% of Bank Prestige in Ukraine.
Our view: We reiterate our positive stance on that quasi-green-field acquisition of Erste Bank, however we do not expect any significant trading impact on the stock price today, as we believe this is already priced in.
As previously announced Erste Bank has acquired Bank Prestige from the Ukrainian founders for a total consideration of EUR 79.8m (USD 104.0m/ UAH 525.0m), which translates into a price/book multiple of 1.76. By 2010 the market share of Bank Prestige is expected to reach some 4 - 5% and the branch network should expand to around 400 branches throughout the country. In order to support the expansion strategy Erste Bank is planning to increase the bank's capital by up to EUR 230.2m (USD 300.0m/UAH 1,515.0m) until and 2010.
Bank Prestige was established in December 2005 and registered as a public corporation in January 2006. It currently has around 300 employees and operates 15 outlets. As of 31 October 2006 total as-sets amounted to EUR 153.3m (UAH 1,009.2m/USD 199.8m).