* Says CEE banking consolidation over
* Sees possibility of divestments in region by western banks
* Would be "very happy" with 4-5 percent Russia market share
(Adds further comments, background)
By Jo Winterbottom and Andrea Mandala
MILAN, July 10 (Reuters) - Banking consolidation in much of
central and eastern Europe (CEE) is over and further moves are
likely only if western banks decide to cut their presence there,
UniCredit's <CRDI.MI> head of banking in the region said.
"The consolidation process in most of these (CEE) countries
is terminated," Federico Ghizzoni, who is also head of Poland's
markets division for the bank, said in an interview on Thursday.
"The only change may come if ... a group in Italy or Germany
or, say, the UK thinks to sell because it has to reorganise
itself," he told Reuters, declining to elaborate.
Banks with a presence in just one or two CEE countries are
seen as the more likely candidates to divest than major players
in the region.
Current market turmoil has hit banks hard and the heat is on
to raise funds, cut costs and recover from writedowns.
UniCredit itself has plumped for a focus on potentially
dynamic growth in the central European region -- which it thinks
could average 4.5 percent over 2008-2010 -- while cutting costs
and jobs in western Europe.
UniCredit is one of Europe's top five banks and already
reaps over half its revenues outside its home base in Italy.
It plans to open 900 branches out of a total 1,300 in three
years in Russia, Turkey, Ukraine and Romania.
RUSSIAN SHARE
Ghizzoni said UniCredit would be "very happy to have 4 to 5
percent" of the Russian market, where it currently has 2
percent.
"Russia is attracting most of our attention," he said,
because of strong growth expected, which should push Russian
banking revenues for the group to equal those of other CEE
countries in 15 years.
In Turkey, another key area for the bank's growth plans,
Ghizzoni said UniCredit estimated it could expand market share
by one or two percentage points under the plan from the current
10 percent.
He would not be drawn on whether UniCredit might be
interested in units in Slovakia and Serbia that Hungary's OTP
Bank <OTPB.BU> might sell, saying only that in Slovakia,
UniCredit did not plan to expand its network.
"We will not grow (in Slovakia) in terms of network or
number of branches," he said.
In Serbia, "we want to be larger in terms of network,"
Ghizzoni said, adding that the bank aimed for 100 branches in
its three-year plan from a current 50, through organic growth.
OTP Bank Chief Financial Officer Laszlo Urban told Reuters
earlier this week the candidates it would put up for sale in its
plans to refocus were in Serbia and Slovakia.
Ghizzoni said UniCredit aimed to boost market share in
countries in the region through attracting new customers but not
through discount offers.
"We never play the price game," he said, adding that
UniCredit aimed to woo clients with proximity and convenience,
good service and customer satisfaction.
Ghizzoni said UniCredit's diversified presence -- with
business in 20 countries in the region -- meant it could be
flexible in its plans.
"Branch openings are being done in a modular way ... if
there is some downturn, we can review the investment side," he
added.
UniCredit will review progress in each country every six
months with a three-year outlook, he said.
"Our diversity gives us flexibility ... if there is a crisis
in Turkey it is not necessarily going to affect Russia," he
added.
(Editing by Quentin Bryar)
