Bank to sign new capital in leading Ukrainian universal bank – Raiffeisen Bank Aval increases Tier 1 capital – Strong signal to the market
The European Bank for Reconstruction and Development (EBRD) is about to become a 30 per cent-shareholder in Raiffeisen Bank Aval JSC (RBA), one of the leading universal banks in Ukraine and a subsidiary of Raiffeisen Bank International AG (RBI), under an agreement signed in Kiev today.
The transaction to be concluded with the EBRD includes the bank participating in a UAH 3.15 billion (€ 122 million equivalent*) capital increase in RBA, which will boost the bank’s Tier 1 ratio. The capital increase is subject to the approval of a general meeting by RBA’s existing shareholders on 3 December. As a result of the transaction, the EBRD will hold 30 per cent of RBA’s total shares.
RBI’s stake in Raiffeisen Bank Aval will decrease from its current 96.2 per cent to around 67.0 per cent. The exact percentage will depend on the extent to which RBA’s approximately 109,000 minority shareholder will participate in the capital increase.
Nick Tesseyman, EBRD Managing Director Financial Institutions, said: “By becoming an equity partner, the EBRD is strengthening the capital base of Raiffeisen Bank Aval alongside with RBI, contributing to a much-needed recapitalisation of Ukraine’s banking sector as a whole and deepening its long-standing cooperation with Raiffeisen Bank International, a major international banking group. This partnership will reinforce Raiffeisen Bank Aval’s position as a major provider of modern banking services of high quality both to businesses and individuals in Ukraine and help unlock the country’s potential.”
“The partnership with the EBRD is a confirmation of Raiffeisen Bank Aval’s stability as well as strength and it proves that RBI is on the right track in the challenging environment in Ukraine at the same time”, said Karl Sevelda, RBI’s CEO and Chairman of Raiffeisen Bank Aval’s Supervisory Board. “And it is a further proof of the excellent cooperation between the EBRD and RBI in the emerging markets of central and eastern Europe.”
On 30 September 2015 Raiffeisen Bank Aval had a Tier 1ratio of 6.86 per cent according to local standards, well exceeding the minimal requirements of the Ukrainian National Bank, which has set the threshold at 4 per cent according to local standards (the threshold will increase to 7 per cent by 1 January 2019). After the transaction Raiffeisen Bank Aval’s Tier 1 ratio will be 14.19 per cent according to local standards (all pro-forma figures are based on third quarter of 2015 results and actual foreign exchange-rates).
*) Based on exchange rates of 23 November 2015
The EBRD, owned by 64 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia. Follow the EBRD on the web, Facebook and Twitter .
Raiffeisen Bank Aval JSC provides its services through a nationwide network of approximately 600 branches to more than 2.8 million customers, including private individuals, corporate customers and SMEs. Raiffeisen Bank International AG (RBI) regards Austria, where it is a leading corporate and investment bank, as well as central and eastern Europe (CEE) as its home market. Fufteen markets of the region are covered by subsidiary banks. Additionally, the Group comprises of numerous other financial service providers, for instance in the fields of leasing, asset management, as well as mergers and acquisitions. In total, around 52,700 employees service 14.8 million customers through approximately 2,800 business outlets, the great majority of which are located in CEE. RBI is a fully-consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (RZB). RZB indirectly owns around 60.7 per cent of the shares, the remainder is in free float. RBI's shares are listed on the Vienna Stock Exchange. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country's largest banking group, and serves as the head office of the entire RZB Group, including RBI.