Strong retail banking franchise with countrywide branch network. Forminglargest foreign-owned banking group in Russia. Consequent focus onhigh-growth countries.
Raiffeisen International Bank-Holding AG (Raiffeisen International)acquires 100 per cent of Russian JSC Impexbank subject to the approvalof the transaction by the Central Bank of Russia and relevantauthorities in Russia and Austria. An agreement was signed between bothparties in Vienna last night. The acquisition marks an acceleration ofRaiffeisen International’s existing retail strategy in Russia. With this acquisition, Raiffeisen International, a member of RZB Group, will become the largest foreign-owned banking group in Russia.
Successful retail bank with strong countrywide branch network
Impexbank was founded in 1993 and is owned by seven Russian companies.Its business focus is primarily on retail customers who are servedthrough its nationwide distribution network of approximately 190branches and offices as well as 350 consumer finance outlets. As of 30June 2005, the bank showed total assets amounting toˆ 1.2 billion, a net income of ˆ 9.0 million and it employed 4,320 people.
”This acquisition substantially enhances our market presence both
regionally as well as with our target customer groups. With the strong
regional presence of Impexbank in Russia we will stop our own ambitious
branch expansion programme. We can now fully focus on attracting newretail and SME customers in the entire country”, said Herbert Stepic,
CEO of Raiffeisen International.
Purchase price: In the range ofmaximal USD 550 million
Raiffeisen International will pay the purchase price in two tranches.The first tranche of up to USD 500 million will be due upon presentationof the audited financial results of 2005. The second tranche of up toUSD 50 million will be payable upon presentation of the auditedfinancial results 2006. This results in a maximal purchase price of USD550 million (plus a possible price adjustment resulting from therevaluation of a real-estate asset) for the full acquisition ofImpexbank.“This acquisition is, due to the small overlap in the branch networks, commercially as well as strategically highly valuable for us. We save a minimum of four years versus organic branch development in Russia”, Martin Grull, CFO of Raiffeisen International, added.
Consequent focus on high-growth countries
The Russian banking market is by far the largest in Central and EasternEurope (CEE). From January until October 2005, the market grew by 39 percent in Euro-terms toˆ 263 billion in total assets. Comparing total assets with GDP shows the market’s tremendous growth potential. While total assets account for 78.1 per cent of GDP in the new EU-Member states of Central Europe, this ratio is only at 42.5 per cent in Russia. Especiallythe business with private individuals and small and medium-sized enterprises (SME) shows high growth rates.
Largest foreign-owned banking group in Russia
With the acquisition of Impexbank Raiffeisen International becomes thelargest foreign-owned banking group in Russia. Together, Raiffeisenbankand Impexbank will form the seventh largest bank in this market of 143million inhabitants. The Russian banking market is highly concentratedand fragmented at the same time. More than 1,500 banks are registered inthe country, while the Top Five accounted for 46.9 per cent of totalbanking assets at the end of 2004.
Raiffeisen International has been present in Russia since 1997 throughits subsidiary ZAO Raiffeisenbank Austria. Raiffeisenbank showed totalassets ofˆ 3.0 billion as of 30 June 2005, placing it at Number 10 in the country. At the time the bank employed 1,312 people and operated 23 business outlets.
Raiffeisenbank has made its mark in the Russian corporate finance marketthrough a series of debut transactions. It syndicated the firstunsecured transaction to a non-state company for the leading retailchain Pyaterochka with a value of RUB 1.5 billion (approximatelyˆ 42.5 million). The financial magazine Global Finance has awarded Raiffeisenbank as “Best Syndicated Loans Arranger in Russia” in 2003 and 2005.
The expansion of its regional presence to Yekaterinburg, Novosibirsk andSamara has brought Raiffeisenbank numerous new customers in corporateand retail banking. The latter has seen almost a doubling of customernumbers to more than 200,000. As of 30 June 2005, the private loanportfolio exceeded USD 500 million. In October, the retail depositvolume surpassed the mark of USD 1 billion and the bank had issued250,000 debit and credit cards.
Ninth successful acquisition since 2000
The purchase of Impexbank is Raiffeisen International’s ninth acquisition since 2000. “We have shown and proven in the past that we are capable of integrating new units into the group swiftly and smoothly. This is also underlined by the current transformation process in Ukraine. We have acquired Bank Aval not even six months ago and we are well on time, this will also be the case with Impexbank”, Stepic added.
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Raiffeisen International operates one of the leading banking networks inCEE with 16 subsidiary banks and many leasing companies in 16 markets.9.2 million customers are served via 2,400 business outlets. RaiffeisenInternational is a fully consolidated subsidiary of RaiffeisenZentralbank Osterreich AG (RZB), which owns 70 per cent of the commonstock. The remaining 30 per cent is free float, the shares are traded onthe Vienna Stock Exchange. RZB is a leading corporate and investmentbank and the central institution of the Austrian Raiffeisen BankingGroup, the country''s most powerful banking group.
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