After Raiffeisen Bank International (RBI) had already declared its intention to withdraw from Russia as a result of the war of aggression against Ukraine, a new exit in Eastern Europe appears to be imminent. The Belarusian subsidiary Priorbank is sold. That would mean a major financial loss.
The company is already in “advanced negotiations” with the Emirati Soven 1 Holding Limited. The financial institution announced this in a press release on Wednesday. The sale would mark RBI’s exit from the Belarusian market. This would also result in a loss of 225 million euros at group level.
RBI expects a “small” effect
This results from the difference between the book value of the equity and the expected purchase price. Furthermore, according to RBI, the completion of the transaction would have a negative impact of approximately EUR 450 million on the RBI Group’s profit and loss account. This is justified by the “reclassification of mainly historical currency losses”, which are recognized in other comprehensive income until closing.
However, the expected impact on the common equity Tier 1 capital ratio, which is important for banks, would be ‘minimal’, the RBI assured in the statement.
Fine-tuning the final details
According to the information, the completion of the transaction is subject, among other things, to proof of financing by the investor, including the provision of all securities for the purchase price. The potential purchase price if the deal closes was not disclosed. RBI owns 87.74 percent of Priorbank JSC.
Source: Krone
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