Portuguese banking group Banco Comercial Portugues (BCP) sold its Romanian subsidiary Millennium Bank to Hungarian group OTP for EUR 39 million, the group officially announced.

BCP and OTP signed the agreement for this transaction on Wednesday, July 30. The transaction is subject to obtaining regulatory approvals.

The Portuguese group will get EUR 39 million cash for its entire stake in Millennium Bank and OTP will also ensure full reimbursement to BCP of the intragroup financing currently provided to the Romanian subsidiary, which is of about EUR 150 million.

BCP marked a EUR 34 million loss from this transaction, as it invested some EUR 73 million in the share capital of its Millennium Bank in Romania. The Portuguese group already charged a provision for this in its consolidated profit and loss account for the first half of 2014.

This transaction marks the exit of the Portuguese group from Romania seven years after it launched operations here. BCP was forced by the European Commission to sell its Romanian operations, after it received financial aid from the Portuguese state to get past the financial crisis.

Millennium bcp started its operations in Romania in late 2007, from zero, after losing the competition for the privatization of Romania’s largest bank BCR, in 2005. The Portuguese lost to Austrian group Erste, which bought BCR for EUR 3.75 billion. Erste has recorded large losses on BCR in recent years.

For OTP Bank, which is partly owned by Hungary’s Government, this transactions is the first step towards achieving its long term goal, which is to get into the top ten of the largest banks in Romania. At the end of last year, OTP was ranked 18^th, with total assets of almost EUR 1.1 billion and 1.3 percent market share. Millennium will add some EUR 635 million to OTP’s assets, which will get close to the EUR 2 billion mark. Both OTP and Millennium posted losses in Romania last year.

Andrei Chirileasa, andrei@romania-insider.com