"Renaissance" - for foreigners

Most of the bank's additional share issue can be purchased by foreign funds

In addition to the two largest Russian state banks -Sberbank and VTB - another credit organization intends to offer its shares to investors. In April-May, Vozrozhdenie Bank will conduct an additional placement of securities. And although the sale of shares will take place by open subscription, it is already clear that Vozrozhdenie has preliminary agreements with buyers. The bank's management expects that as a result of the additional issue of 3 million shares, the share in the bank's capital owned by non-residents will increase from 25 to 34%. According to analysts, Western investment funds, some of which are already its shareholders, will most likely acquire Vozrozhdenie shares.

The fact that Bank Vozrozhdenie, which first placed an additional issue of 10% of its shares (2 million shares) on the stock exchange last summer, is preparing to repeat its success, became known last fall. But if at that time the placement price was $27, now on the RTS exchange they cost $57 per piece, and on the MICEX - 1,535 rubles. A small number of ADRs are also traded on the Frankfurt Stock Exchange.

The Central Bank registered an additional issue of 3 million shares of Vozrozhdenie on March 20. Chairman of the bank's board Dmitry Orlov said at a press conference yesterday that the volume of the additional issue that the bank hopes to place will depend on market quotes. He said that, according to statistics, during the placement of additional issues, about 90% of the bank’s securities are purchased by non-residents, so the bank’s management expects their share to increase to 34%. The share of individuals, according to Mr. Orlov's forecast, will decrease from 46 to 40%.

Currently, the authorized capital of Vozrozhdenie amounts to 220.4 million rubles. If the bank fully places the additional issue, the capital will increase by 12%, to RUB 250.4 million. Judging by the current share price, the bank's market capitalization is RUB 1.16 billion. in RTS or 1.2 billion rubles. on MICEX. If all 3 million shares are placed at a price close to the market price, the capitalization of Vozrozhdenie will be 1.38 billion rubles. The bank's largest shareholder is now its chairman of the board, Dmitry Orlov, who owns 39.66% of the shares. His son Nikolai owns 2.6% of the shares. Almost 26% is nominally held by the Depository Clearing Company (DCC), 6.95% by ING Bank Eurasia. The bank's shareholders also include the leasing company Magistral Finance, the Composition - Asset Management company, the Canadian Imperial Bank of Commerce and the Financial Consulting Center.

According to analysts, the full placement of the additional issue is quite possible. Moreover, it can take place without any special discount, close to the exchange price. Although the shares do not look cheap, this bank is interesting for investors, says Denis Mukhin, an analyst at Brokercreditservice. “The shares will be bought by both current and new shareholders - large institutional investors,” believes Troika Dialog analyst Andrew Keeley. -- For foreigners, this asset is very attractive due to a clear development strategy and growth of the retail business. The market value of the securities is already high, but I think the bank will be able to fully place the additional issue.” He did not rule out that Russian investors would also be interested in these shares.

Thus, the number of bank shares that can actually be purchased on the stock exchange is unlikely to increase significantly. According to Mr. Keely, 26% of Vozrozhdenie shares are currently in free float (this is the number of shares nominally held by DCC). At the same time, significantly fewer securities are actually traded on the market - about 3%. And since the shortage of bank shares for free sale has a strong impact on their prices, we can expect the next price rally for Vozrozhdenie securities.

Elena KHUTORNYKH, Natalia ROMANOVA