Raiffeisen Bank International (RBI) has completed the sale of its Belarusian subsidiary Priorbank JSC to Emirati Soven 1 Holding. An agreement has been signed to sell the 84.74 percent stake, the bank announced on Friday.
Negotiations have now been completed, but the authorities still have to approve the deal. The sale will have an impact on the consolidated result of approximately 300 million euros.
The amount will be realized upon closing of the transaction and will result from the difference between the carrying value of the equity and the expected purchase price, the bank said, which expects closing in the fourth quarter. In addition, the sale is expected to have a negative impact of another EUR 500 million, mainly resulting from the “reclassification of mainly historical currency losses,” which will be included in other comprehensive income until closing. The Belarusian ruble has suffered huge losses against the euro since 2011.
The deal would regulate the withdrawal from Belarus
The background is that currency devaluations are continuously reflected as a capital effect but are not reflected in the profit and loss account (P&L). With the sale, the currency losses should be offset in the profit and loss account on a one-time basis, an RBI spokesperson had already explained in the spring.
The sale will allow RBI to exit the Belarus market completely and further reduce its exposure to the Eastern European region, the bank said. In recent months, both the European Central Bank (ECB) and US authorities have exerted strong pressure on RBI to reduce or cease its activities in Russia and Belarus. RBI is currently scaling down its activities in Russia, but was recently banned from selling by a Russian court via a court order.
RBI owns 87.74 percent of Priorbank JSC, in which the Austrian Raiffeisen Group has had a stake since 2002. In the 2023 financial year, the RBI subsidiary posted a profit of EUR 112 million.
Source: Krone
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