Hungary’s OTP Bank has signed an agreement to acquire Societe Generale’s (SocGen) banking unit in Serbia in a bid to increase its presence in the Eastern Europe.

The agreement follows the earlier deal signed in August when OTP Bank signed agreements to acquire SocGen’s Bulgaria and Albania businesses.

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The scope of the latest acquisition also includes insurance and leasing activities in the country.

Details of Societe Generale Serbia divestment

The financial details of the transaction were not disclosed. However, the divestment of Societe Generale Serbia is estimated to slash SocGen’s fourth quarter earnings by €108m.

SocGen In a statement said that the transaction is expected to have a positive impact on the Group’s CET1 ratio of around 8 basis points, following completion. It will also reduce the group’s risk weighted assets by nearly €1.95bn.

The divestment is part of SocGen’s plan to consolidate its operations globally. It includes reducing its footprint where it lacked adequate presence while bolstering business in its strongholds.

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Societe Generale Group deputy CEO and responsible for International Retail Banking activities, Financial Services and Insurance Philippe Heim said: “This agreement with a view to sell Societe Generale Serbia to OTP Bank is another milestone in the execution of Societe Generale’s Transform to Grow strategic plan.

“It highlights the Group’s capacity to simplify its organisation and focus capital allocation on high potential synergetic activities with a critical size.

“In this context, International Retail Banking activities are a key profitable growth engine for Societe Generale Group and we are committed to further pursue their development.”

The completion of the transaction is subject to approvals from National Bank of Serbia (NBS) and antitrust authorities.