Societe Generale SA (GLE), France’s second-largest bank by market value, agreed to buy VTB Group’s 10 percent stake in OAO Rosbank by swapping unspecified holdings in Russian equities, loans and real-estate.
“It is good that the two sides have finally come to an agreement because VTB will gain more liquid assets in exchange,” Andrey Klapko, an analyst at OAO Gazprombank, said by phone today from Moscow. VTB, Russia’s second-largest lender, said in May that it was holding talks with Societe Generale to sell its minority stake in Rosbank.
For VTB’s stake in Rosbank, Societe Generale agreed to exchange some Moscow-listed equities, loans and real-estate assets, the banks said in separate e-mailed statements today. The banks didn’t provide the financial terms of the deal.
Through the transaction, Societe Generale’s stake in Rosbank (ROSB) will rise to 92 percent, resulting in “limited impact” on the French bank’s core Tier 1 capital and a “positive financial impact” on Rosbank, the Paris-based bank said. VTB won’t hold any shares in Rosbank after the sale, which is expected to close in the fourth quarter, the Russian lender said.
VTB may get Rosbank’s stake in the Moscow Exchange as part of the deal, Prime news service reported in June, citing VTB’s Chief Executive Officer Andrey Kostin. A VTB spokesman today declined to comment when asked whether the holding in the Moscow Exchange is part of the transaction with Societe Generale.
Rosbank was unchanged at 56 rubles ($1.74) by 3:12 p.m. in Moscow trading, while VTB fell 1.3 percent. Societe Generale declined 0.6 percent in Paris.
Societe Generale’s profit from Russia rose in the first half as it kept cutting costs and jobs at Rosbank two years after merging it with its other Russian branch network, BSGV. The French company is among foreign lenders keeping its consumer-banking operations in Russia after London-based Barclays Plc (BARC) and HSBC Holdings Plc (HSBA) abandoned theirs.
Societe Generale made a 65 million-euro ($88 million) first-half profit from Russia, up from 4 million euros a year earlier, the bank said in August. A plan for staff reductions at Rosbank’s Moscow headquarters was completed by the end of July, it said.
In June, Societe Generale pledged to keep building its Russian business as it sought to move beyond the May arrest of Rosbank’s former CEO on bribery charges. Societe Generale has said it’s aiming for a return on equity, a measure of profitability, of more than 15 percent in Russia by 2015.
VTB bought a stake in Rosbank from billionaire Vladimir Potanin’s Interros Holding in December 2010. Interros remains a shareholder.
VTB sold the remainder of its holding in Russian lender Otkritie Financial Corp. in April as part of its program to dispose of minority stakes in financial industry assets.
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