On the 5th of November, 2018, Bank Millennium and Société Générale signed a contract for the purchase of Euro Bank by Bank Millennium. The subject of the transaction is the acquisition by Bank Millennium of approximately 99.79% of shares in Euro Bank for a reference price of PLN 1,833 million.
The final purchase price will be adjusted by the change in the book value of the Euro Bank as at the transaction closing date. After obtaining the required consents and acceptance, the two institutions will be merged in the second half of 2019.
The concluded purchase agreement for the successful Euro Bank is a breakthrough decision for us and I am very happy that I can announce it today. In line with the strategy of “Further digitization, customer-centricity and behavioral personalization”, by 2020 Bank Millennium intends to become the leader of growth in an increasingly concentrated market, hence our openness to new possibilities of inorganic growth and belief in the success of this venture. The President of the Management Board of Bank Millennium is sure that together they will create significant value for clients, employees and shareholders.
The acquisition of Euro Bank is in line with the Strategy for 2018-2020 and should affect the achievement of the ROE at the level of the three best banks in the country. – The merger will create a much larger and more competitive bank, occupying a clear seventh place on the market in terms of assets, deposits and loans, with a particularly strong position in the field of consumer loans. The transaction will bring 1.4 million new customers, which will allow the Bank to reach the sixth position in terms of the number of retail customers in Poland and significantly increase the geographical coverage by improving the Bank’s presence in smaller cities.
The Bank’s position in the area of consumer loans will be strengthened and competences will be maintained in the area of the franchise model operating in the Euro Bank. – Transaction means profitable use of the Bank’s surplus capital and liquidity. – The acquisition will reduce the share of foreign currency mortgage loans in the total loan portfolio to below 25%.
The most important element is the complementing profile of action. Bank Millennium is a universal bank, while Euro Bank is an expert in offering consumer loans. This is important because by 2020 we want to increase the sales of cash loans, especially those directed to new customers, by 40%
Bank Millenium offers also the bank accounts for foreign entrepreneurs that want to open a business in Poland or buy a ready made (shelf company) Polish company. The main bank account is kept in Polish zloty (PLN) and there is an option to add ancillary accounts in foreign currencies such as EUR – European Union Currency, GBP – British Pound , USD – USA Dollar.
If we add complementary distribution networks to it – including the competence of selling loans to new customers for the bank and managing a new form of sales for us through the franchise network – we will receive a partnership built on a solid foundation of knowledge and experience. Together, we intend to build one strong bank with management centers in Warsaw, Gdansk and Wroclaw, based on the best experience of both institutions.