B&N Bank is going to acquire 100% of Moscomprivatbank from Ukrainian lender PrivatBank, B&N Bank said in a press release posted on its website. The value of the asset was determined taking into account its market valuation and given a subordinated loan it will be around Rub 6 bln.
Mikail Shishkhanov, B&N Bank’s majority shareholder, will pay for the asset using cash and Ukrainian assets. The parties intend to wrap up the deal in the near term. The deal will help B&N Bank expand retail business.
At the same time, the Deposit Insurance Agency (DIA) said on its website that B&N Bank was provided with the duties to finance measures to forestall Moscomprivatbank’s bankruptcy. DIA will also grant a Rub 12 bln loan to B&N Bank to maintain Moscomprivatbank’s liquidity and also to execute a project to set up own independent IT infrastructure.
Since March 7, 2014 DIA has fulfilled duties of temporary administration to run Moscomprivatbank. Since then DIA has gained operating control over the bank and has pressed for preserving its assets. “At the time when the temporary administration took charge there was a considerable outflow of retail deposits which substantially declined when the temporary administration began to run the bank," DIA pointed out.
New management bodies will be elected at Moscomprivatbank’s general shareholders meeting and after this the temporary administration’s authority will expire and B&N Bank will be managing Moscomprivatbank in the future.
“The value of PrivatBank’s Russian asset was determined based on its market valuation and exceeds the bank’s capital, which is a sign of high asset quality and the investment appeal of Russian assets held by banking group PrivatBank,“ PrivatBank commented. “We’ve been getting out of the bind, holding our head erect despite difficult political conditions, Moscomprivatbank continued to operate steadily all this time. Thanks to the liquidity cushion, which we piled up for years, we managed to shield our clients against any problems,” PrivatBank management board chairman Alexander Dubilet pointed out, adding the bank withstood and will pass the baton to the new owner on favorable terms. PrivatBank believes that the interest of its clientele will remain a priority for the new owner, as was always the case for the bank.
The media wired that Moscomprivatbank was put up for sale shortly after the Bank of Russia appointed the bank’s temporary administration. Business daily Vedomosti wrote that the bank’s owners intended to sell the assets as soon as possible. But, as the paper’s sources anticipated, the shareholders will hardly be able to sell the bank on market terms because of political pressure. The paper’s interviewees noted that the bank’s potential buyer would have to agree upon a deal with the Kremlin.
