GE mulling options on sale of Czech banking unit

By bne IntelliNews November 26, 2015

General Electric is mulling its options to offload Czech unit GE Money Bank, local media reported on November 26.

GE has reportedly hired JP Morgan and Goldman Sachs to advise it on a strategy for the sale the unit, Hospodarske Noviny reports, citing unnamed sources. The US giant is in the midst of a push to sell many of the assets in its financial group, but although the Hungarian government bought it out of its business there, the disposals of the Polish and Czech units are proving tricker.

Having revealed its intention to sell in April, the US group is now considering two options for the Czech business - to find a strategic investor or to list the bank on the Prague Stock Exchange. “GE is evaluating all options regarding the sale, but no decision has been taken yet," a spokesperson told HN. As part of preparations to sell the bank, GE is asking its clients to vote on a new name.

GE said in the spring that it plans to sell the Czech unit within the next two years. However, nine months down the road it appears unsure of the strategy to find a buyer. Earlier this year, the US group sold Budapest Bank to the Hungarian government for $700mn. It is also pushing to sell Polish lender BPH, but M&A on that market has stalled this year due to numerous uncertainties dogging the sector.

GE is the third foreign bank looking to sell operations in the Czech Republic, which is an extremely stable, but somewhat unexciting, market. While major banks such as Ceska Sporitelna, CSOB and Komercni Banka benefit from a high volume of small margin business, there's little action on the market to boost the fortunes of smaller players. The Czech unit of GE Money Group, the country’s six largest bank by assets, closed the first half of the year with net profit of CZK2.5bn (€92mn), up 14% y/y.

Citibank sold its retail banking business in the country to Austria’s Raiffeisen Bank International in September. RBI, on the other hand, sold its agreed to sell its Czech and Slovak internet banking unit Zuno to ABH Holdings SA, the Luxembourg-based parent company of the Russia’s largest privately-owned bank Alfa. 

Related Articles

Ukraine places $3bn in 15-year Eurobonds at 7.375%

Ukraine has placed $3bn in 15-year Eurobonds at 7.375% per annum, Ukrainian President Petro Poroshenko said during a meeting with international investors in New York on September 18. "Ukraine has ... more

Iran introduces its own rating system for banks

Governor of the Central Bank of Iran (CBI) Valiollah Seif has announced that his institution is to launch a national rating system for banks, Iran Labour News Agency reported on September 17. ... more

Kazakhstan to issue Islamic bonds worth $300mn in 2018

Kazakhstan will issue Islamic bonds, or Sukuk, worth $300mn in 2018, the Astana Times reported on September 15 citing Kazakh president Nursultan Nazarbayev’s ... more