Exclusive-Apollo in talks to sell Slovenian bank Nova to Hungary's OTP - sources

BUDAPEST (Reuters) - Hungary’s biggest lender OTP is in talks to buy Slovenian bank Nova KBM from private equity group Apollo in a deal worth roughly 1 billion euros ($1.2 billion), people close to the matter said.

FILE PHOTO: People pass by the OTP bank branch in Budapest, Hungary February 29, 2016. REUTERS/Laszlo Balogh

OTP has sought to expand its footprint in the Balkans in recent years. It has bought large banks in Croatia, Serbia and several other countries. It owns a small bank in Slovenia, and the purchase of Nova KBM could make it the country’s number one.

Nova KBM, which employs 2,075 staff, last year posted a net profit of 210 million euros, according to its annual report, where it listed a book value per share of 99.13 euros for the 10 million shares.

The sale to OTP could value Nova KBM at roughly book value, said one of the people, speaking on condition of anonymity. Talks are ongoing but no final decision has been taken, sources said.

Apollo, which owns 80% in Nova KBM, and Nova KBM were not immediately available for comment.

The European Bank for Reconstruction and Development, which owns 20%, declined to comment. OTP declined to comment on Nova KBM.

“We are constantly examining new opportunities, in addition to the member countries in new markets, further strengthening our position in the region”, an OTP spokesperson said.

Apollo bought Nova KBM in 2015 for 250 million euros. In 2019, it bought Slovenia’s third largest bank, state-owned Abanka, in a deal valuing it at 444 million euros and then merged the two lenders. OTP was the runner-up on both occasions.

In December 2013, Slovenia’s government bailed out its local banks with an injection of more than 3 billion euros to prevent them from collapsing under a large amount of bad loans. It later privatised several lenders, including Nova KBM.

OTP Chief Executive Sandor Csanyi said earlier this year he was looking at three potential acquisitions, adding that one of those was in a market in which OTP was present with the other two are in new markets.

One source close to OTP said it continued to look at targets in Uzbekistan and the Slovenia, while scrapping plans for a third target elsewhere.

($1 = 0.8356 euros)

Additional reporting by Karin Strohecker. Editing by Mark Potter and Mike Harrison