VTB Africa, a subsidiary bank of VTB Group in Angola, may become a buyer of a former credit institution. Formally, it is not affiliated with VTB, thus, the transaction could take VTB Africa out of the sanctions in anticipation of strengthening Russian-Angolan business cooperation. Experts note that now transactions with clients in dollars can take place with a long delay, which hinders the development of a credit institution.
“Kommersant” found out who will become the buyer of VTB's stake in Angolan bank VTB Africa, about the possible sale of which it became known last week. The Angolan antitrust authority reported that 50.1% of VTB Africa is bought by Rostang ltd. OOO Rostang is registered in Russia, which is owned by Natalya Ranchinskaya, headed by the company Leonid Ranchinsky. The latter is listed in the list of VTB affiliates for 2015 as a member of the board of VTB Africa. Mr. Ranchinsky also owns Zdradexport, which is engaged in the employment of Russian doctors in Angola hospitals.
1.8 billion rubles
made VTB Africa profit for 2018, according to international reports of the VTB Group
Kommersant sources familiar with the situation in VTB Africa indicate that it is Leonid Ranchinsky who may become a new co-owner of an African bank. “If the deal goes through, he will continue to develop the bank together with the second shareholder, the former president of Angolan diamond mining company Endiama, Antonio Carlos Sumbula,” said one of the Kommersant interlocutors.
It was not possible to contact Leonid Ranchinsky himself, Zdravexport informed that he was on a business trip, from which he would return in a month. “There is no final decision on the sale of VTB Africa,” the press service of VTB said “Kommersant” on Saturday, calling the further comments premature.
The reason for selling a stake in a profitable African bank may be sanction risks. According to statements of VTB under IFRS, the Angolan bank earned 1.8 billion rubles in 2018. net profit. However, like VTB itself, VTB Africa is under US sectoral sanctions, which complicates business development. The bulk of VTB Africa’s operations are in dollars, explains the Kommersant source, who is familiar with the situation. Sectoral sanctions do not limit dollar operations, but because of “tougher compliance procedures, they can go slower and more often blocked under the pretext of, for example, combating money laundering,” explains Stanislav Volkov, managing director for methodology of the NKR rating agency.
In December 2018, Finance Minister Anton Siluanov claimed that because of the sanctions, even Asian business partners are delaying payments to Russian companies in dollars, as they are requesting information from OFAC (Department of Foreign Assets Control of the US Treasury Department). According to Mr. Siluanov, up to one third of payments are delayed, and their term can reach a month.
Most likely, in the case of VTB Africa, it is about changing the owner to reduce the sanctions risks for the bank’s counterparties, confirms Alexander Pakhomov, managing partner of MC Law and Business. “After the change of ownership, sectoral sanctions with VTB Africa may not be lifted, but the step itself forms the prerequisites for this,” he explains.
Bank withdrawal from the sanctions is particularly important against the background of growing business activity between Russia and Angola. This year, Angolan President João Lawrence visited Moscow, where he spoke in the State Duma, met with Russian President Vladimir Putin, and also concluded a number of agreements. Then João Lawrence said that Angola is interested in creating public-private partnerships or joint Angol-Russian enterprises in such sectors as manufacturing, agriculture, fishing, energy, tourism, geology and subsoil use. As a result, the Russia-Angola Business Council was established in March, with ALROSA CEO Sergei Ivanov as chairman - the company has been working in Angola since 1993.