RBI sells Belarusian subsidiary to bank from the Emirates

The Raiffeisen Bank International (RBI) today signed an agreement to Selling their share of 87.74 percent of the Priorbank JSC and its subsidiaries Sleep 1 Holding Limited, thus concluding the negotiations that were officially announced on February 14. The RBI announced this in a press release on Friday. The transaction is subject to regulatory approvals and a successful closing, which the bank expects in the fourth quarter of 2024.

According to RBI, the closing is expected to have a negative impact on the consolidated result of around 300 million euros This transaction will result in a net gain or loss, which will essentially be the difference between the purchase price and the carrying amount of Priorbank JSC’s equity. The impact on the Common Equity Tier 1 capital ratio of the RBI Group excluding Russia is expected to be around minus 0.05 percentage points (to 14.7 percent) at closing and results from the estimated difference between the purchase price and the book value of equity as well as the deconsolidation of the risk-weighted assets of Priorbank JSC.

At closing, the RBI expects a additional negative effect from this transaction estimated at about 500 million euros – without any impact on the regulatory capital and capital ratios of the RBI Group. This is related to the reclassification of mainly historical currency losses, which are currently recorded in other comprehensive income.

Once this transaction is completed, RBI will withdraw from the Belarusian market. RBI acquired a stake in Priorbank in 2002. Last year, the subsidiary posted a profit of 112 million euros.

Both the European Central Bank (ECB) and US authorities have been great pressure pressure on RBI to reduce or close its business in Russia and Belarus. In Russia, RBI is currently reducing its business, but a Russian court recently ordered it to sell prohibited by interim injunction.