Agreement on privatization of Ipoteka-Bank was signed by the CEO of the Hungarian OTP Bank Sándor Csányi and the Deputy CEO László Wolf, as well as the Uzbek Finance Minister Timur Ishmetov and Deputy PM/Minister of Investment and Foreign Trade Jamshid Khodjaev, the Ministry of Finance said.
OTP Bank will acquire 100% of Ipoteka-Bank shares owned by the Uzbek Finance Ministry (nearly 97% of the total stake) in two stages: 75% of the shares now and the remaining 25% three years after the financial close of the first transaction, which, as expected to take place in the first half of 2023.
Ipoteka-Bank is the fifth largest bank in Uzbekistan with a market share of 8.5% and a retail clientele of over 1.6 million people.
OTP Bank has been negotiating with the government of Uzbekistan on the possibility of buying a bank in Uzbekistan from the end of 2020.
In September 2021, Deputy PM Jamshid Kuchkarov announced the sale of a 75% stake in Ipoteka Bank to the Hungarian bank. In April, OTP Bank asked Uzbekistan to postpone the deal for two to three months, noting the continued interest in the bank.
“Our long-term goal is to make OTP Group a key player in the Uzbek banking market. In recent years, we have successfully built from a variety of participants of different sizes, operating models, profitability ratios and traditions an efficient international company of significant size by European standards. Currently OTP Group is represented in 11 European countries. The Uzbek deal continues our expansion into a market of around 36 million people. This acquisition is also a new and challenging task for us. I am confident that with our innovative products and services, we will be able to contribute to the dynamic development of the economy of Uzbekistan and create significant value for the shareholders of OTP Bank,” said Chairman of the Board and Chief Executive Officer of the bank Sandor Chanyi in Tashkent after signing the agreement.
Over the past three years, the assets of Ipoteka-Bank have grown by an average of 20% per year in the loan portfolio and by 24% in the deposit portfolio. The bank's after-tax profit has also shown steady improvement in recent years, the Finance Ministry said in a statement.
Ipoteka-Bank has two subsidiaries: Ipoteka Leasing and Imkon Insurance. Both are also part of the deal.
“The arrival of such a large foreign bank as OTP Bank on the local market will help boost competition, improve corporate governance standards and improve the quality of banking services,” said Finance Minister Timur Ishmetov.
“This is a significant milestone on the path of growth and transformation of Ipoteka-Bank, and we are extremely pleased with this result,” said Eler Inomjonov, Chairman of Ipoteka-Bank. “We are confident that, together with OTP Bank, Ipoteka-Bank will provide employees with excellent conditions for building a career and will bring new unique perspectives, expertise and technologies to better serve our clients.”