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bne May 2017 Companies & Markets I 13
Sberbank’s flight from Ukraine points way for Russian lenders to follow
Jason Corcoran in London
The decision by state-controlled Sberbank to sell its Ukraine business paves the way for other Russian lend- ers to abandon Ukraine as relations between the two countries look beyond repair.
Russia’s largest bank has been wracked by protests and vandalism from Ukrainian nationalists since it decided to conform with Russia’s recognition of documents issued by two Kremlin-backed separatist regions in the country’s east. Ukrai- nian 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 discus- sions about selling its Ukraine unit. The Kremlin’s VEB devel- opment 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 Rus- sian Standard, have not yet been hit by sanctions and are hop- ing to stick it out, but might be better off cutting their losses before nationalists turn their attention elsewhere. “It is very likely that other Russian-owned banks present in Ukraine will follow in Sberbank’s path,” says Alexander Paraschiy, head of research at Ukraine’s Concorde Capital brokerage.
Sberbank announced on March 27 that it had signed a legally binding agreement to sell its Ukrainian subsidiary to a consor- tium 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.
With its total assets worth $1.8bn, Sberbank was ranked sixth biggest in Ukraine as of end-2016. The parent company forked out about $170mn to support its Ukrainian unit’s equity last year. The book value of its equity was just $137mn at the end of 2016.
Unnamed sources close to the deal told Russian daily Kommer- sant that Sberbank will get about $130mn for the sale of its Ukrainian division, a $14mn discount on its maximum recently estimated value.
The consortium consists of Said Gutseriev, who has a 77.5% stake in it, and Latvian Norvik Banka, which has a 22.5% stake. The controlling shareholder of Norvik Banka, Latvia’s seventh biggest bank by assets, is Grigory Guselnikov, a UK citizen of Russian origin.
Gutseriev, a Russian and UK citizen who used to work for Glencore, is the son of Russian billionaire Mikhail Gutseriev, who owns Russia’s sixth-largest oil company Russneft. Glen- core holds a 25% stake in Russneft and is also a co-investor in a 19.5% stake in Russia’s state-controlled energy behemoth Rosneft.
“We hope that the decision to sell our subsidiary bank will help to unblock its offices and to renew its normal work,” Sberbank said in the statement.
Some analysts in Ukraine suggested that the sale is just a sleight of hand and that Sberbank’s unit will just be held temporarily by this consortium until relations improve. Gutseriev has his own Russian banking empire centred around B&N Bank, which has swollen in size in the past year after a string of deals.
“It is very likely that other Russian- owned banks present in Ukraine will follow in Sberbank’s path”
“Regardless of the Russian origins of the new investors in Ukrainian Sberbank, we believe Ukraine’s central bank will be glad to approve the deal, as the presence of banks with Russian state capital creates political and reputational risks for the regulator,” says Paraschiy.
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