Sovcombank acquires Vostochny Bank from Baring Vostok funds, Finvision and Sherzod Yusupov
Sovcombank has entered into binding agreements with Baring Vostok funds, as well as Finvision and Sherzod Yusupov, to acquire their stakes in Vostochny Bank. The transaction is expected to close in the next several weeks, following approvals from the Bank of Russia and the Russian Federal Antimonopoly Service.
Terms of the transaction, which was concluded on market terms, were not disclosed. Sovcombank plans to fully integrate Vostochny Bank within 12-18 months.
Dmitry Gusev, Chairman of the Management Board of Sovcombank, said:
“The acquisition of Vostochny Bank strengthens Sovcombank’s position in retail banking, expands our branch network and makes our products and services more accessible in key regions of Vostochny’s presence, including Siberia and the Russian Far East. Vostochny is a significant player in the retail market with a high-quality retail loan portfolio and a professional team. Its client profile, geographic footprint and product portfolio make it attractive in terms of potential synergies with Sovcombank’s business.”
Elena Ivashentseva, Senior Partner at Baring Vostok, said:
“Baring Vostok funds have a long history of working with Sovcombank, and we admire the strong professionalism and impeccable reputation of the bank’s team. Several of the funds’ portfolio companies have actively and successfully developed partnerships with Sovcombank in areas including e-commerce and IT. We welcome Sovcombank as the new controlling shareholder of Vostochny Bank and believe that the deal will mark a new chapter in the bank’s history. We are pleased that it is the Sovcombank team that will be developing the promising retail business model of the bank going forward.”
Yuri Gusev, Director of Finvision, said:
“This deal was made possible thanks to the ongoing reduction in the share of corporate business among Vostochny Bank’s assets. The bank’s management team has worked tirelessly to increase business efficiency, optimise its credit portfolio, create additional provisions, repay loans and sell non-core assets. As a result of these efforts, the bank has become more transparent and attractive for acquisition.”
PJSC Sovcombank is a systematically important bank with assets of RUB 1.5 trillion (IFRS). The bank employs 17,000 people in 2,000 offices across Russia – in 2,334 branches and mini offices located in 988 towns in cities. The bank serves 9 million retail clients and 200,000 corporate clients. Sovcombank has been assigned the following ratings from international agencies: a ‘ВВ’ rating with ‘positive’ outlook from Standard & Poor’s, a ‘Вa1’ rating with ‘stable’ outlook from Moody’s and a ‘ВB+’ rating with ‘stable’ outlook from Fitch Ratings. Its credit ratings from Russian agencies include an ‘A+’ rating with ‘positive’ outlook from ACRA, a ‘ruАА’ rating with ‘stable’ outlook from Expert RA and an ‘AA-‘ rating with ‘stable’ outlook from National Credit Ratings agency. Sovcombank's IFRS financial accounts are audited by Ernst & Young.
Vostochny Bank is a retail bank with assets of RUB 192 billion (IFRS). For more than 15 years, it has focused on retail loans. It is one of top 10 largest card issuers in Russia. Vostochny employs 10,000 employees in 570 offices, the majority of which are located in the Russian Far East, primarily in smaller towns. The bank operates in every municipality in the Russian Far East that has a population of more than 10,000. It is a member of the Deposit Insurance System and is included in the registry of credit organizations treated as significant players in the payment services market by Bank of Russia.
Baring Vostok focuses on private equity investments in Russia, Kazakhstan and other countries in the region. Since 1994, Baring Vostok funds have invested approximately USD 3 billion in around 80 companies. Baring Vostok’s long-standing investors include institutional investors from the United States, Western Europe, Asia and the Middle East. Its portfolio companies include such market leaders as OZON, Kaspi, VkusVill, Familia, Solopharm, Skyeng and Viasat among many others.