The value of half the bank exceeded its assets

records

Yesterday it became known that the International Mortgage Bank (IIB) conducted a private placement of 45% of its shares, for which it received $30 million. This transaction may become another record for the Ukrainian market, since the transaction amount turned out to be twice as high as the bank’s assets. Market participants believe the high price paid for the small bank means the deal may have been non-market in nature.

According to the Association of Ukrainian Banks, as of June 1, 2006, the IIB ranked 115th among Ukrainian banks in terms of assets (UAH 147.93 million) and 130th in terms of capital (UAH 39.65 million). The main shareholder of the bank is the American company Western NIS Enterprise Fund (99.99% of shares).

Yesterday, a Kommersant source in the management of the IIB reported that the bank had completed a private placement of 45% of shares for $30 million. Thus, the price to capital ratio of the bank was 3.7. Let us recall that before this, the highest multiplier with which Ukrainian banks were sold was 6.45. With this ratio, Credit Agricole SA bought 98% of the shares of Index-Bank. However, when the IIB shares were sold, their value for the first time exceeded the bank’s assets - more than twice.

Let us recall that earlier the managing director of Dragon Capital, Tomas Fiala, stated that his company intends to organize an IPO of 45% of IIB shares on the Frankfurt Stock Exchange by the end of June. However, yesterday, Dragon Capital Strategy Director Andrei Dmitrenko said that when selling a small bank, you should not calculate its multiplier. “For example, when placing 18.9% shares of Rodovid Bank in April, the multiplier to the available capital was almost 5.9,” explained Mr. Dmitrenko. “However, after these funds entered the bank’s capital, the multiplier automatically decreased to 2.9.” Both the IIB and its main shareholder, Western NIS Enterprise Fund, refused to comment in detail yesterday.

According to experts, the high performance of the transaction may indicate its non-market nature. General Deputy Chairman of the Board of PrivatBank Yuriy Pikush believes that private placements, due to their closed nature, “cannot be an indicator of the bank’s market value, since the price there can be formed using completely non-market methods.” At the same time, Mr. Pikush is confident that the sales pattern of the rest of the Ukrainian banks may not apply to the second hundred banks at all: “Investors have already realized that among Ukrainian banks only the first ten, or at most twenty, can be attractive.”

NRB Bank President Vyacheslav Yutkin believes that the placement could have been carried out among companies associated with the bank or its shareholders. “We felt the market for ourselves - even our assets of a billion hryvnia are considered absolutely insufficient for placement,” said Mr. Yutkin. “And the IIB has ten times less, while the bank is practically invisible on the market.”

According to the head of the securities department of Arma Bank, Evgeniy Zeltser, such a transaction could raise a number of questions for a strategic investor. “Usually they buy either a blocking stake or a controlling stake,” explained Mr. Zeltser. “Probably, the deal was with ‘our own people’.”

DANIIL Kommersant-ZHELOBANOV

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