TASHKENT
Hungary’s OTP Bank intends to buy a controlling stake in Uzbekistan’s fifth-largest state-owned Ipoteka Bank with a market share of almost 9 percent and over one million retail customers.
Uzbekistan’s government and OTP Bank signed a memorandum on the planned acquisition during the two-day international Economic Forum held with the support of the World Bank and the Asian Development Bank in the capital Tashkent.
The government plans to sell 75 percent of shares in Ipoteka Bank, Uzbekistan’s Deputy Prime Minister, Economic Development and Poverty Reduction Minister Jamshid Kuchkarov told forum participants.
“The deal will be completed within two months … And this is good for privatisation, because we don’t need 10 state-owned banks,” he said.
The minister added that the government planned to use the experience of the privatisation of Ipoteka Bank in the privatisation of another state-owned bank – Uzpromstroybank.
OTP Bank has been in negotiations with the government on the possibilities of participating in the privatisation process since the end of 2020. The sale agreement is expected to be concluded by the end of this year.
“With its population of 34 million, low penetration of bank loans and ongoing reforms, Uzbekistan offers OTP Bank significant growth opportunities, so we consider today’s signing of the agreement an important step,” OTP Bank’s Deputy General Director, Laszlo Wolf, said after signing the document.
Privatisation of Ipoteka Bank is a part of the state programme to reform the country’s banking system with a plan to carry out phased privatisation of large state-owned banks by strategic investors in 2020-2025.
In July, Fitch Ratings affirmed Uzbekistan’s commercial mortgage bank Ipoteka-Bank’s long-term Issuer Default Ratings (IDRs) at ‘BB-’ with a Stable outlook. The agency has also affirmed the bank’s Viability Rating (VR) at ‘b’.
Ipoteka’s IDRs reflect Fitch’s view of a moderate probability of support from the government of Uzbekistan in case of need, as reflected by the bank’s Support Rating (SR) of ‘3’ and Support Rating Floors (SRF) of ‘BB-’.
“This view is based on the bank’s majority state ownership, moderate systemic importance, current role in the government’s economic and social policy, the low cost of potential support relative to sovereign international reserves and a record of capital and liquidity support from the state,” the rating agency said in a statement.