ICICI Bank Ltd has received its board approval to sell its stake in ICICI Bank Eurasia LLC (IBEL), a non-material wholly-owned banking subsidiary in Russia, to Sovcombank, an unrelated third-party Russian bank, as per a stock market disclosure. The deal is expected to close by the end of the financial year 2014.
The sale is subject to execution of definitive agreements and regulatory approvals. The purchase price will be determined on the transaction completion date based on the financial statements of IBEL at that date, it said on Friday.
IBEL offers a wide range of corporate and investments finance products, as well as provides services for retail customers. The firm had total assets of RUB 4.5 billion (around $84 million) and paid-up equity capital of RUB 1.6 billion (around $30 million) as on September 30, 2014. IBEL’s PAT was RUB 28 million ($0.5 million) in the six months ended September 30, 2014. It accounted for less than 0.1 per cent of ICICI Bank’s consolidated total assets at that date and consolidated profit after tax for the period.
The largest private sector lender ICICI Bank acquired the entire paid-up capital of Investitsionno-Kreditny Bank LLC (IKB LLC) which was renamed in 2005 as ICICI Bank Eurasia LLC.
Established in 1990, Sovcombank focuses on consumer lending in small and medium-sized rural towns with the population from 5,000 to 100,000 inhabitants and currently present in more than 730 towns and villages in 41 federal regions. At the end of 2013, Sovcombank had over 1.1 million retail borrowers and over 160,000 depositors.
At present, the bank’s beneficial owners are Moscow developer Pavel Fux (24.48 per cent), the bank’s founders, brothers, Sergei and Dmitry Khotimskys (roughly 19.83 per cent and 10.81 per cent, respectively) and Mikhail Klyukin (12.29 per cent) among others.
(Edited by Joby Puthuparampil Johnson)
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