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Eastern Europe
March 31, 2017 www.intellinews.com I Page 13
Sberbank’s flight from Ukraine points way for Russian lenders to follow
bne IntelliNews
The decision by state-controlled Sberbank to sell its Ukraine business paves the way for other Russian lenders to abandon Ukraine as relations between the two countries look beyond repair.
Russia’s largest bank has been wracked by pro- tests and vandalism from Ukrainian nationalists since it decided to conform with Russia’s recogni- tion of documents issued by two Kremlin-backed separatist regions in the country’s east. Ukrainian President Petro Poroshenko responded in mid- March by imposing new sanctions prohibiting Russian state-controlled lenders from removing capital from Ukraine, while protesters bricked
up Sberbank’s Kyiv headquarters and branches around the country.
VTB, Russia’s second-biggest lender, also state owned, is likewise desperate to get out and is understood to be in discussions about selling its Ukraine unit. The Kremlin’s VEB development bank is currently fielding bids for its Prominvestbank Ukraine subsidiary, after reports last year that Hungary’s OTP Group was in negotiations to buy it.
Privately-owned Russian lenders, such as Alfa Bank and Russian Standard, have not yet been
hit by sanctions and are hoping to stick it out, but might be better off cutting their losses before na- tionalists turn their attention elsewhere. “It is very likely that other Russian-owned banks present in Ukraine will follow in Sberbank’s path,” says Al- exander Paraschiy, head of research at Ukraine’s Concorde Capital brokerage.
Sberbank’s withdrawal comes amid a blockade and a sharp spike in violence between Russian-
Sberbank takes flight from Ukraine with other Russia state-owned lenders expected to follow.
backed separatists and Ukrainian troops. Po- roshenko has imposed a freeze on rail and road cargo links to Russian-backed breakaway en- claves after rebels in the Donbas region moved
to seize control over strategically important steel and coal businesses. The two sides seem to have given up on the Minsk peace accord while the in- ternational community has become bored with the intractable conflict.
Sberbank announced on March 27 that it had signed a legally binding agreement to sell its Ukrainian subsidiary to a consortium of investors. Sberbank expects the deal will be concluded in the first half of this year when the parties get the necessary permits from Ukrainian and Latvian state regulators.
Unnamed sources close to the deal told Russian daily Kommersant that Sberbank will get about $130mn for the sale of its Ukrainian division, a $14mn discount on its maximum recently esti- mated value.
The consortium consists of Said Gutseriev, who has a 55% stake in it, and Latvian Norvik Banka, which has a 45% stake, according to Kommer- sant newspaper. The controlling shareholder of Norvik Banka, Latvia’s seventh biggest bank by assets, is Grigory Guselnikov, a UK citizen of Rus- sian origin.
Gutseriev, described by Norvik Banka as a UK citizen who used to work for Glencore, is the
son of Russian billionaire Mikhail Gutseriev, who owns Russia’s sixth-largest oil company Russ- neft. Glencore holds a 25% stake in Russneft and