Caja Navarra reaches an agreement to purchase the Hungarian bank HBW Express

The formalization of the agreement is linked to the authorization and information regime of the Hungarian and Spanish supervisory bodies.

Caja Navarra (CAN) has signed a purchase option on HBW Express, a Hungarian credit cooperative focused on Budapest, where 20% of the country's population and 50% of its GDP are located.

The formalization of the agreement is linked to the authorization and information regime of the Hungarian and Spanish supervisory bodies, according to a statement issued by CAN, which specifies that HBW Express had a profit before tax (PBT) of 681.430 euros last year and its business plan forecasts 5,57 million euros of PBT for 2011.

The entity also stands out for its "strong technological character", as it carries out 70% of its transactions online, and a return on equity (ROE) of 15%.

After emphasizing that with the formalization of this agreement Caja Navarra will be a "pioneer" among Spanish banks in taking control of a bank abroad, it indicates that in the first phase it will acquire 30% of the Hungarian entity to reach 90% control by 2009.

The development of the agreement, which will be carried out through the subscription of a capital increase, involves the transformation of the credit cooperative into a bank, a process that according to Caja Navarra is already "very advanced".

He adds that the capital increase, approximately 40 million euros, will be invested in transforming a local entity into a bank with national coverage throughout Hungary, with a "significant expansion plan".

This purchase is part of the Cantera 2007-2010 strategic plan, which aims to reach 5% of the entity's total clients abroad, but it also has "important synergies" with the Caja Navarra group, which already has offices with its own staff in Poland, the Czech Republic and Romania through its company VialEste.

Therefore, CAN believes that the purchase of HBW Express will give a new dimension to its business presence in Hungary and could allow it to enter the banking business in Eastern Europe due to its ability to provide on-site financial services to its customers in the area.

The Navarre-based entity, which also has offices in London and New Jersey, as well as agreements for the provision of reciprocal services in the United States, points out in this regard that its international development will gain greater intensity with the listing of its corporate entity on listed markets, and therefore anticipates that the purchase of the Hungarian bank is "the first of a series of future investments of similar characteristics."