VIG swallows up BCR’s insurance business

Following the announcement, the Austrian bank’s shares skyrocketed on the Bucharest Stock Exchange (BVB), registered the highest growth since listing, of 5.9 percent.

VIG, which is insurance market leader with €2.15 bln, will significantly increase its market share from its present 27 percent. In order for the deal to be approved by the Competition Council, market sources have indicated that the Austrians will sell the UNITA insurance company.

The price of the deal exceeds Erste Bank’s net profit in 2007, of €1.17 bln, and is close to the profit estimated by the bank for the whole of 2008. “Profit targets for 2008 and 2009 remain unchanged. We are treating the transaction separately,” said Ionut Stanimir, the Austrian bank’s spokesman.