Czech lender MONETA Money Bank has entered into exclusive negotiations to acquire the local savings and mortgage business of Germany’s Wuestenrot & Wuerttembergische.
MONETA plans to sign the share purchase agreement before the end of this year. Once it is confirmed, the bank will provide the financial details of the transaction.
The acquisition of Wüstenrot – stavební spořitelna and Wüstenrot hypoteční banka is estimated to bolster MONETA’s customer base by nearly 400,000 clients.
It will also add around CZK53bn of retail deposits to its books, boosting its market share from 5% to 8%. Additionally, it is expected to increase MONETA’s mortgage market share from the existing 3% to 6%.
MONETA also expects the acquisition to strengthen its consumer loan portfolio to CZK53bn.
Furthermore, with this deal, MONETA aims to increase annual revenues by at least 10% and profitability by 15%.
MONETA CEO and chairman of the management board Tomáš Spurný said: “We believe this acquisition fits with the bank´s long term retail banking growth strategy and will be accretive to both earnings per share and dividend per share in the short and medium term.”
The company plans to fund the acquisition through surplus capital.
Spurný added: “The transaction will not require any increase of capital and therefore will not cause dilution to our shareholders.
“Equally importantly, MONETA will propose to pay 2019 dividend as previously communicated.”
Following the signing of the definitive agreement, the transaction will need multiple regulatory approvals for completion.