Dutch financial co-operative Rabobank reported a 12 percent rise in interim profit on Monday and ruled itself out of buying Romanian bank Casa de Economii si Consemnatiuni (CEC), saying it was eyeing other markets.
"Our focus is on Poland and Turkey and possibly another country in Eastern Europe at this time but not in Romania," Rabobank [RABN.UL] Chairman Bert Heemskerk told a news conference.
Last week, Rabobank was listed by the Romanian government as one of nine banks that had expressed an interest in the country's fourth-largest bank, which analysts say could fetch as much as $650 million.
Rabobank, one of the Netherlands' leading retail banks with a focus on food and agricultural banking, has a strategy of obtaining banking stakes in emerging markets and Heemskerk said he expected to announce the purchase of another 25 percent stake in a Chinese co-operative bank within two months.
The Dutch bank and the World Bank's private investment arm, the International Finance Corporation, is already close to buying a 25 percent stake in the Chinese Hangzhou Rural Credit Co-operative Union in the east of the country.
Heemskerk said Rabobank would pay between 15 million and 20 million euros for each stake. Over time, he said Rabobank would spend over 100 million euros in China, whose sprawling network of rural credit co-operatives is seen as one of the weakest links in a financial system awash with at least $200 billion in bad debt.
Rabobank's net profit rose to 941 million euros ($1.18 billion) over the first half of the year as strong fee income and solid investment revenue from its insurance operation made up for a lacklustre 2 percent increase in lending income.
Heemskerk said he expected a limited increase in revenue over the rest of the year as tough competition in the domestic mortgage market, a flat yield curve and low interest rates meant that profit margins on loans were shrinking.
Nonetheless, he expected to maintain at least 12 percent net profit growth for the full year because Rabobank intended to keep total costs at the same level as 2004.