Swedbank AB, the largest bank in Sweden and the Baltics by market share, will buy Ukraine's TAS-Kommerzbank for as much as $985 mln to tap surging growth in the former Soviet republic.
The Swedish lender will pay $735 million for Kiev-based TAS, which includes a capital injection of $50 million, Swedbank said in a statement today. It will also pay as much as $250 million in the next three years based on the financial performance of the bank. TAS is Swedbank's largest acquisition since the purchase of Estonia's Hansabank in February 2005. Swedbank is expanding in Eastern Europe, where economic growth is higher and competition less intense than in Scandinavia. It became the leading Baltic lender with the purchase of Hansabank and will expand into retail banking in Russia this year. Ukraine's $105 billion economy grew 7% last year, more than double the pace of 2005. „This is interesting from a strategic point of view due to low penetration of banking products and high GDP growth,” said Kim Bergoe, an analyst at Fox-Pitt, Kelton Ltd. in London who rates Swedbank „in-line.” TAS will in the next few years have a „very limited effect” on Swedbank as it only had 2006 net income of about 70 million kronor ($10 million) against the 10.5 billion kronor analysts expect Swedbank to report, Bergoe said.
TAS, which has 2,300 employees, serves about 100,000 retail clients and 9,000 corporate customers. The bank's total assets at the end of last year amounted to $1.14 billion. TAS almost doubled the amount of offices to 170 last year compared with 2005, a trend that is set to continue, Swedbank CEO Jan Liden said in a telephone interview. „We're building all the time,” Liden said. „Measured on current earnings and book value the price is very expensive, but for this type of investments that is less relevant as it's more about long-term growth,” Bergoe said. Shares of Swedbank gained 0.2% to 269 kronor at 2:18 p.m. in Stockholm. The stock rose 14% in 2006, trailing the 20% gain in the Bloomberg Europe 500 Banks and Financial Services Index. (Bloomberg)