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Sberbank completes Volksbank acquisition

Deals

Sberbank's takeover of Volksbank International will not affect operation of Volksbank Hungary; rebranding is scheduled only for next year. This landmark transaction represents Sberbank's first major acquisition outside the CIS and is part of the bank's global expansion strategy.

Russia’s largest commercial bank Sberbank has completed the 100% acquisition of Volksbank International AG. Sberbank signed a purchase agreement with VBI – Österreichhische Volksbank-AG last September to acquire its subsidiaries in eight countries in the Central and Easter European region. The transaction perimeter does not include VB Romania, VBI's banking subsidiary in Romania.

In the period between signing and closing, the selling shareholders have made capital contributions to increase VBI shareholders' equity to offset Q3 2011 losses, and also agreed to reduce the initial €585 million consideration. The final purchase price was €505 million.

The Central and Eastern European region plays a key role in Sberbank’s acquisition policy, and the new owner has ambitious plans in Hungary as well. “We would like to be the leading retail bank in Hungary,” Valentin Mihov, Sberbank’s director of strategy and development said at the press conference, adding that they do not want to outgrow OTP Bank; however, they aim to achieve a 5% market share in the country. In the next three to five years, Sberbank will concentrate on collecting deposits in Hungary, he added.

The new ownership structure would not affect Volksbank current staff, Mihov said. “We focus on growth on the Hungarian market. In the future, however, layoffs might become indispensable, but this is not our plan at the moment.”

Sberbank can use Volksbank’s corporate design and brand for the next 12 months. “We don’t know yet how and to what extent we will change the design after that. It depends on the relevant economic circumstances,” Mihov said.

“I’m not excluding the possibility of acquiring further banks in the region in the future, but we have no definite plans yet,” Mihov said when asked about possible acquisition plans.

Sberbank is the largest bank in Russia, accounting for about 27% of the aggregate Russian banking assets and employing about 240,000 people. It has approximately 700 million clients, of which 44 million are from countries outside of Russia where Sberbank has subsidiaries or representations. The number of corporate clients comes to 1.5 million. Sberbank operates some 35,000 ATMs, which makes it a bank with the largest ATM network globally, Mihov said.

Sberbank's founder and major shareholder is the Bank of Russia holding over 60% of the voting shares. The bank's other shareholders comprise more than 245,000 legal entities and individuals. The bank has the largest countrywide branch network with 17 regional head offices and more than 19,000 outlets as well as subsidiary banks in Kazakhstan, Ukraine and Belarus, a branch in India, and representative offices in Germany and China.

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