Under this transaction, Bank Millennium will acquire about 99,79 percent of the shares in Euro Bank for a reference price of PLN 1 833 million. Final price will be adjusted by variation of net asset value of Euro Bank at closing of the transaction. After obtaining the required agreements and approvals this will result in the merger of both institutions in the second half of 2019.
- The signed agreement to purchase the successfully developing Euro Bank is for us a breakthrough decision and I am very happy that I can announce it today. In accordance with our strategy „Further Digitalisation, Customer-centricity and Behavioural Personalisation”, by 2020 Bank Millennium intends to become the leader of growth on an increasingly concentrated market, hence our openness to new possibilities of non-organic growth and confidence in this project success. I am confident that together we will create significant value for our customers, employees and shareholders - said Joao Bras Jorge, Chairman and CEO of Bank Millennium.
Why Bank Millennium buys Euro Bank
- The takeover of Euro Bank is fully in line with our Strategy for the years 2018-2020 and should contribute to achieving the ROE ratio at the level of the three best banks in Poland.
- The merger will create a much bigger and more competitive bank, in a clear seventh place on the market in terms of the value of assets, deposits and loans and with a particular strong position in consumer lending.
- The transaction will bring 1.4 million new customers, which will allow the Bank to achieve sixth position in terms of a number of retail customers in Poland and will significantly increase the geographical coverage by improving the Bank’s presence in smaller towns.
- The Bank’s position in the area of consumer loans will be strengthened and the competences in the area of the franchise model operating in Euro Bank will be preserved.
- The transaction means a profitable utilisation of the surplus of the Bank’s capital and liquidity.
- The takeover will reduce the share of FX mortgages in the total loan portfolio to below 25%.
- I am confident that the transaction will significantly boost the profit and the scale of Bank Millennium’s operations and will make us a leading lender satisfying the loan needs of the Poles. Very important is also the fact that the Bank will carry out this transaction without increasing its share capital – comments Fernando Bicho, Deputy CEO of Bank Millennium.
For many years the focus on quality has been, next to innovativeness, a fundamental value of the organisational culture of both banks. Euro Bank’s compatible, customer-oriented culture, confirmed by many awards and leading NPS (net promoter score) ratio, ensures its good matching to Bank Millennium’s DNA.
- We have a lot in common and complement each other well – not only in geographic terms. The most important element is the complementary activity profile. Bank Millennium is a universal bank, while Euro Bank is an expert in offering consumer loans. This is important, because by 2020 we wish to increase by 40% the sale of cash loans, especially those directed to new customers. Add to this the complementary distribution networks – including competencies in new-to-bank loan sales and in running a franchise network – and we will get a partnership built on solid foundations of knowledge and experience. Together we intend to build one strong bank, with managementcentres in Warsaw, Gdańsk and Wrocław, based on the best experience of both institutions – adds Joao Bras Jorge, Chairman and CEO of Bank Millennium.
Transaction closing is expected in the second quarter of 2019 after Polish Financial Supervision Authority (KNF) and Office of Competition and Consumer Protection (UOKiK) approvals have been obtained. Subsequently, the banks will formally merge. The operational merger is planned for the fourth quarter of 2019.
J.P. Morgan and Clifford Chance acted as Bank Millennium financial and legal advisers, respectively.
The Current reports on the transaction can be found on the Bank Millennium website in the Investor Relations section.