If you do not find a buyer at market value
Photo: RIA Novosti
VTB wants to sell its core Ukrainian assets (“VTB Ukraine”) at below market value, told “Izvestia” two sources close to the Bank. The second largest Russian Bank, in contrast to Sberbank, is not going to fire sale (emergency sale with a big discount) to their foreign structure, as hopes to realize the “daughter” at the highest possible price. If it fails, the Bank can reformat, or even close the structure, said a source in the group.
The first went out of Ukraine Sberbank. Russia’s largest Bank on Monday announced the sale of its Ukrainian structures. Buyers 100% of the shares of the credit institution became the Latvian Norvik Banka (Norvik Bank) Grigory Guselnikova and businessman Gutseriyev said (via Belarusian company). The amount of the transaction is estimated at $130 million, slightly less than one Ukrainian capital of Sberbank. The second largest Bank, VTB does not want to follow the example of Sberbank and immediately for itself ruled out the option of fire sale.
— We expect to sell “VTB Ukraine” at the market price. We have a certain pricing plug, in which we are ready to engage with potential buyers negotiations — told “Izvestia” a source close to the Bank. — So not in a hurry to sell the asset in an emergency mode.
In response to the question of whether the list of candidates for the purchase of the structure, the source said that a final list of investors is not yet approved, as in the negotiations appear some interested parties and go
— If the asset will fail to gain the amount by which the group expects, discussed the possibility that they will be closed, — said a source in the VTB Group.
Therefore, VTB is in no hurry to leave the Ukrainian market. In this country the group has two subsidiary banks — “BM-Ukraine” and “VTB Ukraine”. In early 2015, the loan portfolios of these banks were reserved by more than half. The main task which puts before itself the management of the group is to minimize possible losses in the transaction.
Prospects of business development in Ukraine for Russian banks now is not, I’m sure the Director on Bank ratings Agency “Expert RA” Alexander Saraev. In this regard, he believes that the price of Ukrainian assets of Russian banks is low, and accelerated the desire to sell even more reduce the price.
— Why VTB is not particularly in a hurry to arrange the sale, showing the market that it is ready to support the work of subsidiary banks in Ukraine, until a worthy offer, — said Alexander Barns.
If you implement the Ukrainian assets will not work, remains an option with the surrender of the banking license and liquidation of Ukrainian “daughters”, says the expert with a “plan B” Bank.
— This will need to satisfy all the creditors, but it is quite a likely scenario, he says.
Interviewed by “Izvestia” experts agree in opinion that the group will not be able to get for the sale of “VTB Ukraine” a large amount. Reason for significant accumulated debt and sanctions.
— According to IFRS for 9 months of 2016, the Bank’s capital amounted to 4.13 billion hryvnia, of which 34.2 billion hryvnia — the authorized capital and 30.3 billion — accumulated loss. Also the Group of VTB Bank placed Bank-to-Bank loans amounting to the equivalent of 5.9 billion (30 September 2016), which will probably also be somehow taken into account in the deal — said “Izvestia” head of Bank ratings National rating Agency Yegor Ivanov.
If you talk about the market value of the asset, it is necessary to note that to date the credit institution is under severe restrictions and sanctions imposed by the National Bank of Ukraine and one of the key questions is whether changes in the shareholder structure mean an automatic lifting of all existing restrictions in the short term, the expert added.
The answer to this question largely determines the probability of “market” sales. Otherwise, for example, the transaction price may be conditional or assume payments in future periods and, under certain conditions, — said Yegor Ivanov.
Another possible scenario is a temporary sale with an obligation to repurchase after a certain period, while the cost for the first part of the transaction may be acceptable to the VTB Group (including all the reputation and image of nuances), and the transaction itself, in turn, can be funded by the Group, did not exclude the expert.
Earlier, the head of VTB Andrey Kostin did not rule out the transformation of the Ukrainian “daughter” in Finance company. He explained that there are two ways: the sale of the Bank or the gradual reduction of the balance, perhaps, the transition of the asset to the Finance company. However, he noted that the transaction on sale of BM Bank is a small “daughter” in Ukraine — is in the final stage.
After the deterioration of relations between the two countries in 2014, Russian banks have begun to systematically reduce its presence in Ukraine. As a result, today the Russian banking business is not more than 10% of the Ukrainian banking sector. A new round of aggravation of the situation occurred in March of this year, when the savings Bank officially started to serve customers from LNR and DNR. In response, Ukraine imposed sanctions against five Russian banks: Sberbank, VTB, BM Bank VS Bank and Prominvestbank. After that, the press Secretary of the Russian President Dmitry Peskov said that Russian banks would like to leave the Ukrainian market.
In VTB have refused official comments.