Vienna-headquartered Sberbank Europe AG, a subsidiary of Sberbank of Russia, said on Wednesday (Nov. 3) that it has agreed to sell its subsidiaries in Croatia, Bosnia and Herzegovina, Hungary, Serbia, and Slovenia, as part of a plan to focus on key markets and explore new business models.
The banks with total assets of 7.33 billion euros ($8.51 billion),162 branches and around 600,000 clients (as of YE 2020), are being sold to Belgrade-based AIK Banka a.d. Beograd, Slovenia’s Gorenjska Banka d.d., Kranj and Agri Europe Cyprus (AEC) Ltd.. AEC is a leading financial holding company operating within the territory of Southeast Europe. President of the AEC Board is Miodrag Kostic, a 62-year-old Serbian prominent businessman whose MK Group acquired a majority stake in AIK Banka. Kostic is also the owner of Gorenjska Bank.
“After careful analyses of several options, the transaction with AIK Banka, Gorenjska Banka and Agri Europe Cyprus Limited resulted to be the most attractive one from Sberbank Europe AG perspective” the bank said in a statement. “The purchasers have a large regional presence as well as a clear vision of the future development, supporting further growth of the banks and ensuring that the clients will continue to receive services of the same high quality” it added.
The deal worth around 500 million euro is expected to close next year, pending regulatory approval.
Sberbank forecasts neutral financial result and limited impact on its capital adequacy ratios from the deal in consolidated financial statements of the Group.
The Russian state-run lender has been planning to scale down its business operations in Europe for years. In 2019, it sold its Turkish subsidiary Denizbank -once Sberbank’s largest unit outside Russia- to Emirates NBD Group for 170.7 billion roubles ($2.7 billion). In 2018, left the Slovak market, selling its Slovak subsidiary to local financial group Penta Investments. Sberbank said that it will keep Sberbank CZ a.s., its unit in the Czech Republic, and that it will continue with its current business model.
Sberbank is Russia’s largest bank. Its international operations – subsidiary banks, branches, and chapters – include the UK, US, CIS, Central and Eastern Europe, India, China, and other countries.
The Government of the Russian Federation represented by the Ministry of Finance of the Russian Federation is the principal shareholder of Sberbank owning 50% plus one voting share of the bank’s authorized capital, with the remaining 50% minus one voting share held by domestic and international investors.
The bank has been expanding into non-core businesses which range from cyber security to online cinema and food delivery and aims for around 60% revenue from non-core areas by 2030.
Herman Gref, CEO, Chairman of the Executive Board of Sberbank, in an interview with Reuters in March said the bank had no choice but to develop non-banking businesses as shrinking margins threaten the very survival of traditional lenders.