Sovcombank receives permission from authorities to purchase HCF Bank, will consolidate it into Q1 financial reporting

MOSCOW. April 1 (Interfax) - Sovcombank received permission from the Russian Central Bank and the Federal Antimonopoly Service to purchase HCF Bank (which operates under the Home Bank brand).

Sovcombank said that HCF Bank would be consolidated into its reporting for the first quarter of 2024, which will be published in May.

Meanwhile, the deal will be technically closed once an additional issue by Sovcombank to pay for the purchase is registered.

The acquisition of the bank will allow Sovcombank to ensure the growth of its customer base by 50%, its retail loan portfolio by 25%, and individual deposits by 20%, a company statement said.

Sovcombank announced plans to buy HCF Bank in mid-February. The deal is scheduled to be closed by the end of 2024. At the first stage, Sovcombank plans to buy out 51% of the shares of HCF Bank via an additional share issue totaling 5% of its charter capital (slightly more than 15 billion rubles). At the second stage, through the end of 2024, Sovcombank will acquire the remaining 49% shares of HCF Bank, to be paid out in cash in installments throughout 2024-2025.

The valuation of HCF Bank for the transaction amounted to 80% of the bank's capital (excluding perpetual bonds and dividends for 2023).

Sovcombank, with assets of 3.212 trillion rubles, took 9th place in the Interfax-100 ranking of banks for 2023; HCF Bank, with assets of 309 billion rubles, took 32nd place.