REUTERS
The European Bank for Reconstruction and Development (EBRD) is about to become a 30% shareholder in Raiffeisen Bank Aval JSC (RBA), one of the leading universal banks in Ukraine and a subsidiary of Raiffeisen Bank International AG (RBI), under an agreement signed in Kyiv on Wednesday, according to the EBRD.
The transaction to be concluded with the EBRD includes the bank participating in a UAH 3.15 billion (EUR 122 million at the forex rate set for November 23) capital increase in RBA, which will boost the bank's Tier 1 ratio, the EBRD said in a statement on Wednesday.
The capital increase is subject to the approval of a general meeting by RBA's existing shareholders on December 3. As a result of the transaction, the EBRD will hold 30% of RBA's total shares.
RBI's stake in Raiffeisen Bank Aval will decrease from its current 96.2% to around 67.0%. The exact percentage will depend on the extent to which RBA's approximately 109,000 minority shareholder will participate in the capital increase.
"By becoming an equity partner, the EBRD is strengthening the capital base of Raiffeisen Bank Aval alongside with RBI, contributing to a much-needed recapitalisation of Ukraine's banking sector as a whole and deepening its long-standing cooperation with Raiffeisen Bank International, a major international banking group," EBRD Managing Director Financial Institutions Nick Tesseyman said.
In his words, this partnership will reinforce Raiffeisen Bank Aval's position as a major provider of modern banking services of high quality both to businesses and individuals in Ukraine and help unlock the country's potential.
On September 30, 2015, Raiffeisen Bank Aval had a Tier 1 ratio of 6.86% according to local standards, well exceeding the minimal requirements of the Ukrainian National Bank, which has set the threshold at 4% according to local standards (the threshold will increase to 7% by January 1, 2019). After the transaction Raiffeisen Bank Aval's Tier 1 ratio will be 14.19% according to local standards (all pro-forma figures are based on third quarter of 2015 results and actual foreign exchange rates).
UNIAN's memo. Raiffeisen Bank Aval JSC provides its services through a nationwide network of approximately 600 branches to more than 2.8 million customers, including private individuals, corporate customers and SMEs. Raiffeisen Bank International AG (RBI) regards Austria, where it is a leading corporate and investment bank, as well as central and eastern Europe (CEE) as its home market. Fufteen markets of the region are covered by subsidiary banks. Additionally, the Group comprises of numerous other financial service providers, for instance in the fields of leasing, asset management, as well as mergers and acquisitions. In total, around 52,700 employees service 14.8 million customers through approximately 2,800 business outlets, the great majority of which are located in CEE.
RBI is a fully-consolidated subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB). RZB indirectly owns around 60.7% of the shares, the remainder is in free float. RBI's shares are listed on the Vienna Stock Exchange. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country's largest banking group, and serves as the head office of the entire RZB Group, including RBI.
The EBRD, owned by 64 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia.