PARIS/WARSAW (Reuters) - Poland's Bank Millennium (WA:MILP) signed an agreement to buy 99.8 percent of Societe Generale's (PA:SOGN) Polish business Euro Bank for 1.83 billion zlotys ($484 million), Millennium said on Monday.
The deal, which forms part of French bank SocGen's plans to divest non-core assets to focus on its core businesses, reinforces a broader trend of consolidation in Poland's banking sector, which has accelerated in the past few years.
The disposal of Euro Bank also follows the sale announced in August of SocGen's banks in Bulgaria and Albania to Hungary's OTP Bank (BU:OTPB).
The transaction will lead to a 2 billion euros (1.75 billion pounds)reduction in Societe Generale risk-weighted assets and improve its core tier-one capital ratio by 8 basis points, SocGen said.
Societe Generale said it would continue to provide Corporate and investment banking services in Poland, through its Global Banking and Investor Solutions business, and will remain present in the country in various other activities.
The deal is expected to close in the first half of 2019 and is still subject approval of Poland's financial market regulator KNF and antimonopoly authorities, the lenders said.
Bank Millennium, which is a unit of Portugal's Millennium (LS:BCP), also said that it did not plan to issue new shares to finance the deal.
Euro Bank is the 17th largest Polish bank with assets of 14 billion zlotys (2.85 billion pounds), and is more than 20 times smaller than the country's biggest lender PKO BP (WA:PKO). Last year, it made a net profit of 103 million zlotys.
Reuters reported in June that SocGen was exploring a sale of Euro Bank, given increasing competitive pressures on the business.
Sources said at that time Santander (MC:SAN), Credit Agricole (PA:CAGR) and Portugal's Millennium were among the potential buyers.