Romania’s third largest bank, Banca Transilvania, is looking to consolidate its position and increase market share by buying one of the banks currently for sale in Romania, according to local and international media.

Bloomberg wrote on Wednesday that Banca Transilvania is in talks to buy unprofitable Volksbank Romania, which has been put up for sale by its Austrian parent earlier this year.

“The possible transaction is at an early stage of negotiations and there’s no certainty it will materialize,” according to Bloomberg, which quoted two people with knowledge of the process.

Local mergers & acquisitions journal Mirsanu.ro reported one week ago that Banca Transilvania’s was indeed in talks to buy Volksbank Romania, but that negotiations failed. According to Mirsanu.ro, Banca Transilvania is now in talks to buy Bank of Cyprus’ assets in Romania.

Banca Transilvania made no official announcement so far, as none of these talks has yet materialised in a deal (as of November 26).

Volksbank is currently one of the largest banks for sale in Romania. The bank had EUR 3.1 billion in total assets, at the end of 2013, and last year posted net losses of EUR 104 million. Austrian group Oesterreichische Volksbanken (OeVAG) currently controls 51% of the bank’s shares, and has mandated Rotschild investment bank to sell the bank by December 2015.

Volksbank is undergoing a portfolio clean-up process. In July, the bank sold a non-performing loans (NPL) portfolio of almost EUR 500 million. The bank still had EUR 600 million to repay to its parent-group in Austria, according to Mirsanu.ro.

Bank of Cyprus is also in process of selling its whole asset portfolio in Romania, which is worth some EUR 545 million (nominal value). British group HSBC has this mandate.

Meanwhile, Banca Transilvania is one of the most profitable banks in Romania, and among the few which managed to increase their business in recent years. Banca Transilvania had total assets of some EUR 7.7 billion, at the end of September 2014, and posted a net profit of EUR 76 million, for the first nine months.

Banca Transilvania is listed on the Bucharest Stock Exchange (BVB) and has a market capitalization of almost EUR 1 billion. Its main shareholders are EBRD, which holds 14.6% of the bank’s shares, Romanian investment fund SIF Moldova, with about 8%, and IFC, the investment arm of the World Bank, with 5.4%. Horia Ciorcila, the bank’s founder and president of the board, also holds about 5% of its shares.

editor@romania-insider.com