Hungary’s OTP bank announced it would not submit a binding bid for the 99.75% stake in HVB Splitska banka by the deadline on March 17. OTP explained its decision with the failure to reach agreement with the Croatian central bank on competition issues. The central bank demanded that OTP sell its subsidiary OTP banka Hrvatska or most of its branches in case it buys HVB Splitska. However, OTP said it did not plan to divest any of its subsidiary banks and OTP banka Hrvatska provided good basis for expansion on Croatian market. HVB Splitska was put up for sale in line with the requirements of the central bank after Italy’s UniCredit merged with HVB Group. UniCredit owns the biggest domestic bank, Zagrebacka banka, which together with HVB Splitska could have got a dominant position. Zagrebacka bank had a share of 24.4% of aggregate banking sector assets at end-2005, while HVB Splitska had 9% share.
