TWO of Ireland's major financial institutions are vying to buy a shareholding in a Hungarian bank. Bank of Ireland and a consortium involving Irish Life have been shortlisted to bid for a minority stake in the State owned Kereskedelmi es Hitelbank.
Bank of Ireland confirmed its interest in bidding for the "25 per cent plus one vote" stake in K&H bank which is expected to be sold for about $30 million (£19 million). Irish Life confirmed that it is involved in a consortium with the Belgian bank, Kredietbank, to bid for K&H.
The Hungarian privatisation authority, APV, yesterday announced that it has shortlisted Bank of Ireland and the Kredietbank Irish Life consortium as the final bidders for K&H. Five parties bad expressed interest in bidding for the stake. APV is looking for a strategic investor for the bank.
K&H is the second largest bank in Hungary in terms of the number of branches and the third largest in terms of total assets. It has 154 branches throughout Hungary and total assets of $2.2 billion. Set up by the government in 1987, its headquarters is in Budapest and it has shareholder funds of $90 million. K&H is involved in retail, commercial and investment banking. The bank is understood to have about 11 per cent of total Hungarian deposits.
Irish Life is interested in bank assurance possibilities in the Hungarian market, a spokesman said. The company has had a relation ship with Kredietbank for some time. Kredietbank has a 6 per cent stake in Irish Life, while Irish Life owns 2 per cent of the Belgian bank. In addition, the two companies are partners in Irish Intercontinental Bank where Kredietbank owns 75 per cent and Irish life owns 25 per cent.
Kredietbank has a majority stake in the consortium bidding for K&H. The Irish Life spokesman declined to disclose the size of its share but said "it is being done on a partnership basis".
Bank of Ireland has been examining opportunities in eastern Europe for a number of years. Through its international services division it is involved in about 50 contracts in Eastern Europe, and Russia advising banks on their development. If its bid for K&H is successful it would be its first move into these markets as an owner. AIB is finalising acquiring a majority stake in the Polish bank, Kreditowy.
