No orthodox saviour for emerging Europe's banks
There are too many banks for sale in emerging Europe, and not enough buyers.
From one perspective, the end of May wasn’t a bad time for M&A prospects in central and eastern Europe, despite scares of a Greek exit from the euro.
Nationalized Austrian lender Hypo Alpe hired Deutsche Bank to sell its businesses in the former Yugoslavia. In Turkey, Citi sold a 10% stake in Akbank for an expected $1.15 billion. Most encouragingly, Sberbank entered exclusive talks to buy the Turkish unit of Dexia, for $4 billion.
The problem, however, is that these deals were all of one kind – burdened western banking institutions seeking to free up capital from non-core assets. That kind of M&A is hardly very promising for the region’s longer-term prospects.
After the latest events in Greece, telecoms might join financial institutions as a relatively resilient sector for M&A bankers. But as in the banking and oil and gas sectors, strategic investors in telecoms might be rather limited to a small number of Russian state-linked buyers.
In the coming months, M&A deals even by Russian buyers will be almost impossible if they are reliant on funding from the capital markets. Emerging market equity funds suffered billions of dollars of outflows in the last weeks of May.