Citicorp has reached an agreement to buy a $266 million-asset Hungarian bank.
The purchase of Europai Kereskedelmi Bank, a Budapest-based corporate bank with six branches, would bolster Citicorp's decade-old stake in Hungary.
No price has been disclosed for the deal, which is subject to regulatory approvals and is expected to be completed in around two months.
Since 1986, Citicorp has built a corporate and consumer banking operation in Hungary with $568 million of assets. Combining the two operations would create Hungary's eighth-largest commercial bank, with assets of $834 million and a market share of about 3%, Citicorp said in a release.
The planned acquisition of the Hungarian bank follows Citicorp's acquisition last month of Mexico's Banca Confia for $245 million.
Both deals are in line with Citicorp's strategy of expanding its retail and middle-market corporate business in emerging markets through acquisitions.
In recent months Citicorp has considered buying local institutions in Poland, Argentina, and Thailand and, more recently, South Korea.
Europai Kereskedelmi, founded in 1990, is owned jointly by Bank Austria and Cassa dio Risparmio delle Provincie Lombarde, Italy's largest savings bank. The Hungarian bank serves small and medium-size local corporations and has a small consumer business.
A Citicorp spokesman declined to comment on reports that Citicorp is looking closely at buying a financial institution in South Korea. He added that though the bank is looking to expand business in that country, "we have made no decision as to which of the ways we might go."
Several other U.S. banks have also bought foreign financial institutions, marking a clear break with an earlier reluctance to expand internationally through acquisitions. Wachovia Corp. and NationsBank Corp. have both purchased banks in Brazil, while BankBoston Corp. has extended its network in Argentina through retail acquisitions there.
In a recent speech, Edward Crutchfield, chairman and chief executive of First Union Corp., also raised the possibility that U.S. banks might extend their consolidation on a worldwide scale by striking alliances and eventually merging with foreign institutions.
