VTB will eat Sarovbusinessbank

Andrei Kostin’s Bank proceeded to takeover of regional Russian banks.
Plans to expand business announced by VTB through the acquisition of regional players are beginning to be realized - an agreement has been reached on the purchase of 81% of Sarovbusinessbank. The amount of the transaction, according to experts, may exceed 6 billion rubles. The bank is historically connected with Rosatom, it serves nuclear power enterprises and is closely connected with local authorities and state employees. As a result, VTB will significantly strengthen its presence in the region, both in terms of the network and the number of active customers. According to “Kommersant”, it is possible that a new deal may soon be announced on the purchase of a regional player, Zapsibkombank in the Tyumen region.

VTB announced an agreement to acquire an 81% stake in Sarovbusinessbank (Nizhny Novgorod Region). The parties plan to close the deal until the end of 2018, after receiving the approval of the departments. In the future, VTB intends to consolidate 100% of the bank’s shares, having repurchased shares of minority shareholders on the offer, and to join the bank in 2020, after which it will completely go under the VTB brand. At the same time, at least before integration, VTB promised to keep the bank’s team, reinforcing it with personnel from the group. The parties do not disclose the price of the transaction.

Sarovbusinessbank is the largest bank in the Nizhny Novgorod region. According to the Interfax rating at the end of the first half of the year, the bank ranks 104th in terms of assets (44.8 billion rubles) and 94th in terms of capital (6.2 billion rubles). In the first half of the year, the bank received a net profit of 504 million rubles. According to the information on the bank’s website, 30.94% of shares are under the control of Vladimir Travin, former Atomenergoprom CEO Vladimir Travin, the bank’s CEO Irina Alushkina owns 19.99% of shares, Demian Moscow holds 14.10%, and the remaining shareholders own less than 10%.

The plans for growth due to the purchase of regional players in VTB have been repeatedly mentioned. Negotiations with the owners of Sarovbusinessbank, according to Kommersant, have been going on since 2016, but it was only now possible to reach final agreements. VTB interest is understandable, experts say. “The bank has a transparent, low-risk business model, is historically closely associated with Rosatom and serves the nuclear enterprises of the Nizhny Novgorod region as part of salary projects, besides, it is actively working with the local administration and has a large number of state employees as payroll clients,” says FG Managing Partner "Dmitry Donskoy" Dmitry Kurbatsky. This is a stable, understandable passive base, besides, the bank shows good rates of return on capital - about 17% and does not have increased credit risks in the portfolio. " According to him, with all this in mind, the transaction can take place at the price of capital or even with a small premium.

Now VTB has 28 offices in the region, Sarovbusinessbank has 69 offices. Thus, the regional network of the bank will more than double. “The number of active clients in the region will also double to 400 thousand people, and the share in the local deposit market will grow from 9% to 14%,” says a Kommersant source familiar with the situation. “It is possible that after the announcement of the change of ownership, the competitors they will try to lure some of the customers, but it is unlikely that there will be a significant outflow, VTB is actively working with Rosatom at the federal level, and it is also quite comfortable for the local authorities. ”

The acquisition of Sarovbusinessbank is the second transaction of VTB, announced in 2018. In early October, the bank announced the closure of a deal to buy an 85% stake in Bank Vozrozhdenie, which has a strong position in the Moscow Region market. Sources “Kommersant”, familiar with the situation, argue that by the end of the year another deal may be announced - on Zapsibkombank (Tyumen Region). VTB does not comment on this question. Negotiations go over a year (see “Kommersant” on October 31, 2017). According to the source, “Kommersant” in the region, while they are not finalized, but already in the final stage.