OTP Bank to purchase Nova KBM in Slovenia

OTP Bank has signed a share sale and purchase agreement to purchase 100% of Slovenia’s Nova KBM d.d., owned by funds managed by affiliates of Apollo Global Management, Inc. (80%) and EBRD (20%). The acquisition of the bank is the most significant acquisition in the history of OTP Group enabling the banking group to become the market leader in Slovenia. The transaction is expected to close in the second quarter of next year, subject to obtaining all required regulatory approvals.

Nova KBM d.d. (Nova KBM) is Slovenia's second largest bank with a market share of 20.5% in terms of total assets as of December 2020 and approximately 1,900 employees. The bank is a key player in the Slovenian banking market. In addition to retail and small businesses services, it also provides a full range of banking services to medium and large companies. The financial terms of the transaction were not disclosed by the parties.

Nova KBM, whose profitability has steadily improved in previous years, acquired Abanka in 2020, the third largest player in the Slovenian banking market. The successful integration of the two banks was completed last December. The current transaction is outstanding in the history of OTP Group: its significance is also shown by the fact that, upon closing of the transaction, OTP (owning SKB Bank and Nova KBM) will become the market leader in both loans and deposits in the Slovenian banking market with a share of almost 30%.

The closing of the transaction is expected in 2Q 2022, subject to all required regulatory approvals.

“So far, we have seen our presence in Slovenia as a huge opportunity and, in line with OTP Group's strategy, we have been looking for further growth opportunities in the country since entering the market in 2019. At that time, we acquired the fourth largest player in the Slovenian banking sector, SKB Bank, which has since been successfully integrated into OTP Group.

“With the new transaction just announced, OTP Bank will become the market leader in the Slovenian financial sector.

“With the acquisition of Nova KBM, we can further strengthen the already outstanding stability and profit-generating ability of OTP Group, while growing faster than all our competitors. This process will not be interrupted, we are currently examining the possibility of further acquisitions in the region” - said László Wolf, Deputy CEO of OTP Bank.

Anita Stojčevska, CEO of SKB Bank commented: “Thanks to an excellent team of employees and with the strong support of the owner OTP Group, SKB Bank successfully completed the integration with the group and at the same time achieved excellent business results. SKB Bank has been recognized by the professional public (The Banker, Global Finance and Euromoney) as the best bank in Slovenia for several years in a row and maintains its Superbrands position also under the OTP brand umbrella. OTP Group is a strategic owner, which is proven by supporting SKB Bank’s digital transformation strategy to offer the best customer experience solutions and to grow on different market segments. We can continue to rely on the support, assistance, and cooperation of OTP Group also in the coming period. I strongly believe that we will build together the biggest bank in Slovenia and play an important role within OTP Group.“

John Denhof, CEO of Nova KBM added: “Over the last years, Nova KBM has undergone an amazing journey, and has positively transformed itself along virtually every dimension. The bank has met or exceeded all of its strategic targets, has more than doubled its balance sheet, has successfully merged and integrated four banks incl. most recently Abanka and has achieved sustainable profitability, strong regulatory compliance and sound operational resilience. In addition, we have profoundly improved our corporate culture, modernized our IT and risk infrastructure, and simplified our products and processes to be able to offer best in class financial services for our clients across all segments.

 “We should all be very proud of what we have achieved together, and I wish to personally and sincerely thank all of our incredible staff and also our shareholders Apollo and EBRD for the constant support, investment and focus.

“It should be no surprise that our success has led to economic interest in our franchise. As we enter the next phase of our development, I am very confident that OTP ownership will be highly beneficial for both our clients, our staff, and other key stakeholders. The resulting bank will be an undisputed market leader, with unprecedented national reach, offering tremendous opportunities for our people and a long-term foundation for even greater successes.”

OTP Bank has been one of the most active financial institutions in the European acquisitions market. Following the financial crisis, new transactions started in 2014 and since then OTP Bank has announced the purchase of 11 financial institutions and banking portfolios in nine countries and then completed their successful integration into the banking group. In addition to Slovenia, OTP Group has entered new countries such as Albania and Moldova. With this unique acquisition performance, OTP Group has become the most active banking sector consolidator in Central and Eastern Europe, substantially improving its market position and augmenting the profit contribution of non-Hungarian group members.

OTP Group, headquartered in Budapest, Hungary is one of the most stable financial groups in the CEE region with outstanding profitability and stable capital and liquidity positions. At present, the banking group provides universal financial services in 11 countries to more than 16.3 million customers, has a network of nearly 1,500 branches and has 38,000 employees. The group’s parent bank, OTP Bank is a public listed company with a diverse international ownership structure.