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Societe Generale close to completing a deal to sell its Bulgarian arm

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Societe Generale close to completing a deal to sell its Bulgarian arm

French bank Societe Generale is about to sell its Bulgarian subsidiary Expressbank, which controls the group's leasing operations in the country, to Hungarian banking group OTP, according to reports, quoted by Reuters. Sources told Reuters the deal, close to being finalised, would also involve the divestment of SocGen's operations in Albania. Reports of the sale had already appeared on Bulgarian business weekly Capital in April, citing a rejected bid of €380m.

Societe Generale Expressbank is the parent of SOGELease Bulgaria, SocGen's foothold in the country's leasing market. Would-be buyer OTP controls DSK, Bulgaria's second-largest lender, which also has a leasing division. "The deal [in Bulgaria] has been largely agreed. The central bank has already held a preliminary meeting with DSK Bank over it," one of two sources said.

The report follows on from multiple indiscretions since March that SocGen was looking to dispose of operations in Poland and several Balkan countries. Talks reportedly involved OTP and private equity firm Apollo Global Management, which has been building up investment in the leasing sector over the last few years. SocGen's retreat from smaller but expanding markets in central and eastern Europe runs counter to multiple rival's strategy to build or increase presence in the regionq Reuters said.

Last year, DLL and Austria's Erste Group signed a memorandum of understanding to tap into what they said is a leasing market with business potential of €17bn (£15bn). Erste went to acquire Slovenia's Aleasing.

Germany banking group IKB has sold most of its extensive European leasing network to UK-based PEAC, with the Romanian subsidiary going instead to BNP Paribas Leasing Solutions.

Societe Generale was last month reported to be in talks to merge with Italy's UniCredit, which has a larger and stronger presence in eastern Europe's retail and leasing segments.

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