The transaction is expected to be finalized in the fourth quarter, pending regulatory approvals. Banco Bilbao Vizcaya Argentaria SA (BBVA) has agreed to sell its Romanian subsidiary, Garanti BBVA, to Raiffeisen Bank International for €591 million ($680.2 million).
Raiffeisen Bank International announced on Saturday that following the completion of the deal, its Romanian subsidiary will become the third-largest bank in the country by total assets. BBVA stated that its Garanti BBVA subsidiary in Romania is the nation's tenth-largest financial institution, with total assets of €4 billion and a market share of 2% as of the end of last year.
Raiffeisen Bank International plans to merge the acquired business with its existing operations in Romania. The bank views the Romanian market as attractive for retail, corporate, and investment banking services. Johann Strobl, Chief Executive Officer of Raiffeisen Bank International, stated, "This transaction is a significant strategic move in one of the most attractive banking markets in Central and Eastern Europe, a country we know very well."
BBVA expects the sale to increase its core tier 1 capital ratio, a key measure of financial strength, by approximately 10 basis points and to contribute a €112 million gain to the group's profit and loss statement. Conversely, Raiffeisen Bank International indicated the acquisition would reduce its group core tier 1 capital ratio by 60 basis points, excluding its Russian operations.
Both parties anticipate the transaction will close in the fourth quarter, subject to regulatory approval.
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