Hungarian OTP could acquire one of the largest banks in the world’s 9th biggest country
Kazakhstan and Hungary have agreed to establish a joint investment fund worth 100 million US dollars, which will operate at the Astana International Financial Centre, Kazakh Ambassador to Hungary Abzal Saparbekuly announced today at the Akorda Presidential Palace, according to a correspondent of the Kazinform News Agency.
OTP may conquer Kazakhstan
Kazakhstan is currently in talks with several major Hungarian companies, including Hungary’s largest financial institution, OTP Bank, regarding its potential entry into the Kazakh market, Saparbekuly said.
The ambassador added that a delegation from Hungary’s telecommunications and space IT company had arrived in Kazakhstan as part of the official visit by the Hungarian President. “During the visit, discussions began on joint projects with Kazakhstan Garysh Sapary, Kazakhtelecom, as well as cooperation in the field of defence,” he noted.
In addition, MOL, the Hungarian oil and gas company, is holding talks on major investments in Kazakhstan’s gas sector, Saparbekuly said.
According to him, a delegation from Hungary’s MVM company, which operates in the nuclear power sector, is also expected to visit Kazakhstan soon to discuss a number of joint projects in nuclear power, infrastructure, and energy.
President Sulyok in Astana
Another major project involves the creation of a transport and logistics hub in Hungary. The relevant agreement was reached last year. In this regard, KTZ Express is in talks with the Hungarian side, with China also involved. A joint memorandum is expected to be signed shortly, the Kazakh ambassador noted.
The ambassador also announced that Kazakhstan and Hungary had completed negotiations on the establishment of the 100-million-dollar investment fund. “It is planned to sign the agreement to establish the fund at the Astana International Financial Centre soon,” he said.
As reported earlier, Head of State Kassym-Jomart Tokayev has held talks with his Hungarian counterpart, Tamás Sulyok, who arrived in Astana for an official visit.
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OTP may have EUR 3–3.5 billion available for acquisitions
OTP Bank told Világgazdaság, a Hungarian business news outlet, that it is actively exploring new acquisition opportunities, particularly in the Central and Eastern European region. According to the bank’s publicly stated strategy, it will only enter new markets if it can secure a position among the top five players through a single acquisition.
Gábor Bukta, lead analyst at Concorde, noted that Kazakhstan represents a far more developed market in Central Asia compared to Uzbekistan. He added that the Hungarian bank could have between EUR 3 and 3.5 billion allocated for such a deal, which would be sufficient to acquire one of the five largest local banks—excluding the market leader. However, OTP is unlikely to purchase a bank below its book value, a key feature of its previous acquisitions. Mr Bukta concluded that acquiring a bank with operations in both Kazakhstan and Uzbekistan would be an ideal move for OTP.
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Banks deal with one thing -money. Just to be clear Kazakhstan is ranked 48th globally by nominal GDP and Hungary is 57th. OTP has a geographical presence outside Hungary but it specializes all in the poorest Eastern European countries plus Uzbekistan and now Kazakhstan. It is the champion bank of Orbanistan.
Anyone getting into bed with OTP the worst bank in eastern Europe is a Fool. Khazakstan do yourself a favour and disallow this transaction. Don’t Do it!