Troubled bank stiil recovering from the 2008 global financial crisis had 84 percent of its shares sold to unknown investors.
VAB Group, a large Ukrainian bank, has been sold to a group of investors led by Russian investment bank Troika Dialog.
Dutch-registered Kardan, a subsidiary of TBIF Financial Services, announced on Jan. 27 that it had sold an 84 percent stake in VAB for 53 million euros to the Troika-led group. The deal is expected to be closed in coming weeks.
The new owners take control of a bank that was last autumn ranked as Ukraine’s 28th largest in terms of net assets out of more than 150 registered in the country. But the identity of the new investors represented by Troika was not immediately revealed.
Backed by Israeli investors, Kardan said it expects to post a capital loss of 30 million euros on the sale. It first invested into VAB before the global financial crisis of 2008 buying a stake in the bank from its CEO, Sergei Maximov. Kardan further boosted its stake in VAB in the aftermath of the global economic crisis to an 84 percent controlling share in VAB.
VAB is one of many Ukrainian banks hit hard by the 2008 global financial crisis and recession that followed.
In a report to investors released on Jan. 27, Kyiv-based investment bank Dragon Capital said that VAB’s net losses widened to $40.6 million in the fourth quarter of 2010 from $11.8 million in prior quarter.
The cause was cited as an increase in total provisions to $25.9 million from $21.9 million, including $18.5 million of loan loss provisions.
“The bank’s full-year net loss thus widened to $78.1 million from $46.9 million in 2009,” Dragon concluded.
“We think the bank is still under-provisioned will need to set aside at least $50 million more in 2011. At the same time, we remain positive about the bank’s liquidity position, its nearest external debt redemption not due until 2014. VAB’s end-2010 foreign exchange liabilities stood at $412 million (53 percent of total liabilities), including $113 million of Eurobonds and $62 million of subordinated loans maturing over 2014-17, while cash and cash equivalents totaled $142m (17% of assets),” Dragon added.
