Private equity firm AnaCap buys into Czech banking

By bne IntelliNews December 17, 2009

Guy Norton in Zagreb -

London-based private equity firm AnaCap Financial Partners is buying Banco Popolare Ceska Republika, a Czech subsidiary of Italy's Banco Popolare. AnaCap, which specialises in financial sector investments, says the banking industry in the Czech Republic offers a compelling mix of prudence and high growth potential.

"Households in the Czech Republic have amongst the most conservatively managed finances in Europe, so there is significant scope in the Czech Republic for a growth in sensible and simple consumer credit and deposit products," says AnaCap partner Chris Patrick. He adds that the Czech Republic's financial position is one of the strongest in the emerging markets universe, with a favourable combination of low foreign exchange volatility and sovereign indebtedness. At the same time, with household debt representing just 23% of GDP versus an average of 53% in the Eurozone, the country's financial services sector also offers plenty of scope for growth.

Banco Popolare Ceska Republika is a corporate and retail bank with seven branches. AnaCap says that it plans to broaden the product mix, deepen management capabilities, and optimise the management of assets and liabilities at the bank. "The credit crunch has encouraged some companies to divest non-core activities and this acquisition [in the Czech Republic] provides us with the rare opportunity to grow a banking business in one of the most profitable banking markets in Europe," says Patrick.

In June this year, AnaCap raised a €575m fund - almost double its €300m debut fund, attracting the likes of Goldman Sachs, Morgan Stanley Alternative Investment Partners, Allianz, Honeywell, the New Jersey Division of Investments and Adams Street Partners as investors. Goldman Sachs and the New Jersey Division of Investments are also both said to have each bought a 5% stake in AnaCap.

Recent acquisitions include UK banking groups Cattle Invoice Finance and Aldermore, as well as Malta's Mediterranean Bank, a Malta-based private bank. Banco Popolare Ceska Republika represents AnaCap's second acquisition in the Czech Republic. In September 2007, it bought Credoma, an independent mortgage provider.

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