Sovcombank plans to attract $ 300 million on the exchange

The co-founder of Sovcombank announced plans for the withdrawal of the credit organization for an IPO after April 2019. The bank does not have an acute need for capital, and this statement is more of an image character, experts say.
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Sovcombank is looking for a window to conduct an IPO after April 2019, co-founder of the credit organization Sergey Khotimsky said in an interview with Bloomberg. According to him, the bank plans to raise $ 300 million, which will allow it to increase capital by at least 20%. Khotimsky believes that the current negative attitude of foreign investors towards Russia and the banking sector should change.

As the banker specified, Sovcombank has no capital requirements, and the placement will take place only if the market conditions are favorable for the offer of shares.

Sovcombank - a large private bank with assets of 704 billion rubles, is included in the top 15 in the Russian banking market. The founders of Sovcombank and controlling shareholders are brothers Sergey and Dmitry Hotimskie.

After the crisis of 2014, Sovcombank experienced rapid growth, mainly due to its portfolio of securities, which at that time accounted for almost half of the assets. In March 2018, the bank announced the agreement to merge with RosEvroBank. Now the amount of assets of the two credit institutions is almost 900 billion rubles.

Image transaction

The bank does have a safety margin for capital, and it shows a good profit, so it does not have an acute need for raising funds, says Alexander Danilov, senior director of the group on financial organizations analysis Fitch Ratings.

According to the data of the Central Bank, the capital adequacy ratio of the bank (N1.0) was 12.3% with a minimum of 9.875% taking into account the buffer, the capital adequacy ratio (H1.1) - 7.7% with a minimum of 6.375%, and the standard capital adequacy ratio (H1.2) - 8.78% with a minimum of 7.875%.

According to Alexander Losev, the head of the Sputnik-Capital Management Company, usually a transaction begins to be announced long before it was committed, when one or two anchor investors were found.

When asked why it is more convenient for a bank to raise $ 300 million through an IPO than through the placement of a subordinated debt, Losev replied that the second is not the most desired tool for an investor.

"Shares allow to influence business decisions and receive profit from profits if it is distributed among shareholders. In addition, for investors who want synergy with the bank and business growth, such participation will be quite attractive, "the financier said.

With the help of additional capital raised through IPO, Sovcombank will be able to spur the pace of business development, adds Alexander Danilov.

"So far, the IPO statement looks preliminary in view of an indefinite period (for three years depending on the market situation) and is more like an image thing. As for the bank's readiness for additional requirements for transparency, Sovcombank is one of the most transparent banks in terms of reporting details and publicly disclosed additional disclosures, "concludes Danilov.