Raiffeisen Bank International (RBI) has sold its Slovenian operations to Biser Bidco, which is managed by an affiliate of US investment firm Apollo Global Management, for an undisclosed sum, RBI announced in a December 10 press release.
RBI had previously announced plans to sell its Polish and Slovenian operations, as well as offloading internet bank Zuno and scaling back lending in Russia, Ukraine and Hungary. The bank said the step to sell its Slovenian branch represents the implementation of its strategic measures.
Meanwhile, Apollo is looking to increase its holdings in Slovenia and other Western Balkans markets. The acquisition of Slovenia’s Raiffeisen Banka follows its purchase of Slovenia’s second-largest bank Nova Kreditna Banka Maribor (NKBM) in a €250mn deal earlier this year.
The sale of Raiffeisen Banka is expected to close in the first half of 2016, subject to regulatory approval. Slovenian Raiffeisen Leasing is not included in the transaction.
The expected deconsolidation effect on RBI’s consolidated result will amount to minus €49mn, RBI’s statement said. This will be booked in the fourth quarter of 2015 and forms a part of the restructuring costs already communicated in the bank’s official outlook.
The aim of the bank’s divestments in the region is to raise cash and help rebalance its lending portfolio, as well as to lower its risk weighted assets (RWA) by almost a quarter thereby improving its tier one capital ratio.
In its December 10 statement, RBI said that with the closing of the transaction, RWAs are expected to be reduced by approximately €270mn.
Raiffeisen banka reduced its losses for January-September by 52.8% year-on-year, from €17mn to €8mn, the bank announced on November 12.
The bank’s total assets in Slovenia at the end of the third quarter of 2015 were down by 30.6% in annual terms to €843mn. The number of customers decreased from 63,953 to 58,629.
RBI is present in almost all Western Balkans countries, including Bosnia & Herzegovina, Croatia, Serbia and Kosovo, the only country where RBI reported an increase in net interest income through September.
The sale of RBI’s Slovenian operations was already expected as the bank’s chief executive Karl Sevelda told an analyst conference call on November 12 that the sale of the bank was at a “very advanced stage” and would “most likely” happen in the next month.
The bank also expects to complete the sale of Zuno to Russia’s Alfa Bank in the first quarter of 2016, but has so far struggled to sell Poland’s Polbank amid uncertainty over the new Law and Justice government’s policy on Swiss franc debtors.
Apollo has not yet commented on its plans for Raiffeisen Banka. The firm already holds an 80% stake in NKBM alongside the European Bank for Reconstruction and Development (EBRD) with 20%, and appears to be looking for additional investment opportunities in the region.
In November, Apollo Investment Corporation, which is managed by Apollo Investment Management, an affiliate of Apollo Global Management, reportedly submitted a bid for Telekom Srbija alongside Telekom Slovenije. A decision on the Serbian incumbent’s privatisation is imminent.