Банки

According to Nadra Bank’s press service, Group DF became the major investor in Nadra Bank on November 19, 2008. "Nadra Bank has attracted a large investor, Group DF, a private international group of companies. Today, the bank possesses a stronger position than earlier, due to the synergy of a successful banking brand and a strong industrial group," states the press release.

"A new, and most importantly, Ukrainian investor, ‘Group DF’, has entered the bank. It will give a new impetus to strengthen the bank`s stability, its further economic development, and will help to retain a leading position on the market," reads the press release, quoting Nadra Bank President Ihor Hylenko.

Nevertheless, no circumstances of the deal have yet been disclosed.

Our view: As stated in an earlier Sokrat news pieces, we believe that the DF Group’s acquisition of Nadra Bank will have a POSITIVE impact on the issues the bank faces, due to the stated intention of the new investor to provide additional resources for the bank, in addition to the DF Group becoming a corporate client of the bank to service its cash flows for all of its accounts.

We anticipate that Nadra Bank’s prospects depend on the amount of resources that will be provided by DF Group and its ability to restore the population’s confidence, which is extremely low today.

It was previously announced that a 68% stake in ProminvestBank, the sixth-largest bank in Ukraine by assets, was sold to a strategic investor. Yesterday Vladimir Krotyuk, the Vice-Chairman of the National Bank of Ukraine (NBU) and Director of NBU’s provisional administration of ProminvestBank, officially announced that the new owner of the 68% stake is Swiss company SLAV AG, which is affiliated with Ukrainian MPs Sergey and Andrey Klyuev.

Vladimir Krotyuk also announced an increase in the statutory fund of Prominvestbank from UAH 200 mln to UAH 1.1 bln, noting that the new investor in ProminvestBank would have to pay UAH 900 mln for the additional issue of shares within 10 days of November 11. The new owner would also have to invest UAH 3.6 bln in Prominvest in the form of subordinated debt or long-term deposits before December 5.

It is significant that fulfillment of these conditions is the inherent part of the deal between SLAV AG and the State and their refusal may lead to ProminvestBank’s nationalization by the state. This was stated in other words by President Viktor Yuschenko, Prime Minister Yulia Tymoshenko, and ProminvestBank’s temporary administrator Vladimir Krotyuk. “If the equities are not offered by the set date, the bank will be recapitalized through stock redemption by the state,” emphasized Vladimir Krotyuk.

On October 7, the NBU took PromInvestBank under temporary administration. The initial reason for the bank’s deteriorating financial situation was rooted in the rush to make early withdrawals of bank deposits, which triggered difficulties in making payments.

Our view: As mentioned in Sokrat’s previous reports, the successful acquisition of Prominvest by a new owner with a good amount of free resources will positively impact on the population’s confidence in ProminvestBank and the Ukrainian banking sector in general. We see this acquisition as a much better variant to resolve the bank’s issues than nationalization, taking into account the fact that the Ukrainian budget has no funds for acquiring the bank and providing funding, and that the acquisition could be probably only be financed by a UAH overissuance. As well, we believe that a private investor would be more effective with respect to the management of ProminvestBank.

We believe that the announced UAH 4.7 bln investment in Prominvest will have POSITIVE impact on its liquidity. We anticipate that Prominvest’s future prospects will depend on its ability to restore the confidence of its clients.

It is significant that new owners are already feeling strong pressure from the NBU and the Ukrainian Government, which, considering the role Prominvest plays in the Ukrainian banking system, want to be confident about the future of the bank and return it to normal functioning as fast as possible. We see the nationalization of Prominvest unlikely but the possibility that such a decision may still be taken gives the NBU and the Ukrainain Government additional advantages in establishing the terms and conditions of the deal.

The international holding company 'Group DF' has agreed to purchase over 50% of the shares in Nadra Bank, one of Ukraine's largest banks, the company's press release announces.

According to a company press release, "The Group DF is pleased to confirm it has entered into an agreement for the acquisition of a controlling stake in Nadra Bank".

The details of the deal are not disclosed due to its confidential nature. However, what is known at this time is that the deal is expected to be completed within the next few weeks.

Last month, after the banking crisis hit Ukraine, Nadra Bank obtained a USD 1.5 bln loan from the National Bank of Ukraine(NBU) at 12% for repayment of Nadra’s USD 130 mln syndicated loan and a USD 100 mln Eurobond issue, as well as to maintain its liquidity. Recently, Nadra has redeemed its USD 100 mln Eurobond issue.

Nadra Bank is among Ukraine's ten largest banks. It has about 700 branches throughout Ukraine, has 9,000 staff, 2.6 mln retail clients, and holds about UAH 25 bln in assets.

The Group DF is an international holding company that unites the assets of RosUkrEnergo owner Dmitriy Firtash. It has a portfolio of operating enterprises and investments. Its assets are mainly in power engineering, chemical and energy industries, and real estate.

As of October 1, Nadra Bank's net assets were roughly UAH 26.186 mln, with a credit portfolio of UAH 19.013 mln and equity capital of UAH 2.134 mln. Its profit for January-September was UAH 321.76 mln, while it was UAH 348.62 mln for the entire 2007 year.

Stockholders owning more than 10% are Cypriot companies Novartik Trading Limited (60.99%) and Manmade Enterprises Limited (30.74%).

Our view: We see this news POSITIVE for Nadra Bank, its customers and the Ukrainian banking system in general. Considering the fact that the current owners were not able to provide additional resources or obtain foreign debt, we are sure that selling the bank to an owner, who has a good amount of free resources, is the best way to manage the bank’s liquidity problems.

We suppose that Mr. Firtash is buying Nadra, which could be acquired much cheaper today considering the crisis and the situation of the current owners, with an intention of selling this bank after the financial crisis ends. We believe that Mr. Firtash is going to continue developing Nadra Bank as a country-wide bank with a full cycle of services for both retail and corporate customers.

Sokrat currently has Nadra Bank under review and will keep readers posted as to the current developments concerning this bank’s affairs and prospects.

Yesterday, the National Bank of Ukraine (NBU) announced that a 68% stake in PromInvestBank, one of the largest banks in Ukraine, has been acquired by a strategic investor, whose identity has not yet been disclosed.

According to a statement issued by the NBU, On November 3, 2008, a new strategic investor claimed the right to own and manage a significant stake (68%) in the Closed Joint-Stock Company PromInvestBank and has factually become the new owner of the bank. According to the NBU, the property rights of the new owner were registered in accordance with Ukrainian legislation.

The new owners of PromInvestBank have already proposed a number of measures concerning this financial bailout to the bank`s temporary administrator. In particular, these measures foresee the allocation of funds to help the bank restore its solvency and liquidity within the period of one month, as well as implementing a greater than five-fold increase in the bank`s statutory capital.

The temporary administrator is currently making plans concerning the bank’s new management, including the supervisory council and the board. Afterwards, the bank is expected to work as usual.

On October 7, the NBU took PromInvestBank under temporary administration. The initial reason for the bank’s deteriorating financial situation was rooted in the rush to make early withdrawals of bank deposits, which triggered difficulties in making payments.

Our view: This news is POSITIVE, not only for ProminvestBank, but also for the Ukrainian banking system in general. In spite of the fact that the identity of the bank’s new owner (s) is not yet clear, we believe that the NBU is confident about the future of Prominvest and has received guarantees about the amount of money that is going to be invested in ProminvestBank to increase its liquidity, as well as guarantees about the objectives and ability of the new owner(s) and its respective management to fulfill its commitments to the public and to the corporate sector.

It is significant that the forthcoming solution with respect to the issue of ProminvestBank will impact positively on the population’s confidence in Ukrainian banks, effectively demonstrating that ProminvestBank specifically and the Ukrainian banking sector, in general, are able to get through this phase of the crisis.

We anticipate that the new owner(s) of Prominvest and all circumstances of the deal will be officially announced in the near future, which apparently will be before the end of this week.

Austria`s Raiffeisen Zentralbank Osterreich AG (RZB) has provided yet another loan, valued at USD 150 mln, to its Ukrainian daughter company, Raiffeisen Bank Aval [BAVL UZ, U/R].

The agreement on providing the credit will mature on December 31, 2009, with the possibility of its prolongation until December 31, 2010.

On October 13, 2008, the Austrian bank extended its first loan to Raiffeissen Bank Aval, which was worth USD 180 mln.

Volodimir Lavrenchuk, the Head of Raiffessen Bank Aval, explained that the financing is part of the funding program agreed upon by these two banks, demonstrating RZB`s serious intentions to strengthen its operations in the country. OJSC Raiffeisen Bank Aval was founded in March 1992. It is one of the largest banks in the country according to the National Bank of Ukraine, with a network of 1,138 branches throughout Ukraine.

As of October 1, 2008, it had UAH 52.5 bln (USD 9 bln), which represents an increase of 18% since the beginning of 2008. On July 1, 2008, the bank’s assets totaled UAH 5.469 bln, with its net assets at UAH 48.652 bln, and its credit and investment portfolio worth UAH 41.824 bln (UAH 5.826 / USD 1).

Raiffeisen Bank Aval is 95.68% owned by RZB`s holding company, Raiffeisen International Bank-Holding [RIBH AV, N/R], which acts as a steering unit for the group`s banking and leasing subsidiaries in central and eastern Europe.

Our view: This news is POSITIVE for Raiffeisen Bank Ava (RBA). In accordance with our expectations, Raiffeisen Zentralbank is continuing to provide funding for its subsidiary company, increasing its liquidity and giving RBA reasons to feel confident in the midst of this current sensitive economic situation.

Sokrat currently had Raiffeisen Bank Aval under review and will keep readers posted on the current developments concerning this bank’s affairs and prospects.