Russian Sovcombank has received permission from the Central Bank of Russia (CBR) and the Federal Antimonopoly Service (FAS) to carry out the merger deal with (Home Credit & Finance Bank), previously announced in February, Renaissance Capital wrote on April 2.
SovComBank was one of the first banks to come under full blocking sanctions upon Russia’s full-scale military invasion of Ukraine. But the bank was also the first to recently extract sanctioned assets under a regulatory loophole provided by the Central Bank of Russia (CBR).
In 2023 Sovcombank held an IPO that was not only the first IPO of a Russian bank under full blocking sanctions, but also the first banking IPO since 2015. As followed by bne IntelliNews, an IPO of the bank has been on the agenda since 2012, but has been constantly delayed by takeover deals, the 2014 Crimea annexation crisis and the 2020 pandemic.
The deal to acquire 100% of HCF Bank will be conducted in two stages, including payment of 51% through an additional issue of Sovcombank shares (for the amount of about RUB15bn) and redemption of the remaining 49% through cash payment in 2024-2025.
“Sovcombank has a track record of efficient and rapid integration of acquired businesses. The merger is expected to allow Sovcombank to additionally increase its retail loan portfolio by 25% and deposits by 20% in 2024, and potentially expand its retail customer base by 1.5 times (by 3mn people),” RenCap commented.
The analysts estimate that the deal could add more than RUB10bn to Sovcombank's net profit for 2024, maintaining it at RUB87bn (return on equity of 25%), and view the merger as a positive factor for Sovcombank's share price.
