US investment fund J.C. Flowers reached an agreement with Intesa Sanpaolo, already active in Romania, to sell First Bank Romania - a lender with a focus on corporate lending, active on the retail market as well. 

J.C. Flowers took over Piraeus at the end of 2017 for EUR 35 million and rebranded it into First Bank in 2021. In 2019, the US fund bought the local branch of the Israeli group Leumi and merged the two entities.

Intesa Sanpaolo Bank has been active in Romania since 1996 as a universal bank. 

The terms of the deal were not revealed, but First Bank’s own capital was RON 850 million (EUR 170 million) at the end of 2022, and it can serve as a benchmark. In another deal currently under negotiations, OTP group initially asked for a price of 100% of the local subsidiary’s own capital. But it later reportedly lowered its expectations to a 0.8 multiple. This would put First Bank’s price at EUR 136 million – however, the profiles of the two banks are slightly different, and so might the multiples.

Both Intesa and First Bank have a market share of some 1.1% by assets at the end of 2022, and the takeover will propel the Italian bank to the tenth or even ninth place after two other takeovers among the ten largest Romanian banks. Thus, UniCredit will take over Alpha Bank, and Banca Transilvania is reportedly the leading bidder for OTP Romania. 

The First Bank takeover is currently subject to the approval of the relevant regulatory and competition authorities and is expected to be completed in the first part of 2024, Ziarul Financiar reported.

US investment fund J.C. Flowers put First Bank up for sale last year and was close to selling it to UniCredit (which, instead, preferred Alpha Bank, with a larger market share and slightly different profile) in a broader deal.

iulian@romania-insider.com

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