MTS Bank announces plans for IPO on Moscow Exchange
MOSCOW. April 12 (Interfax) - MTS Bank has announced plans to carry out an initial public offering of its common shares on the Moscow Exchange .
Investors will be offered newly issued shares and the proceeds from the IPO will be used to implement the bank's growth strategy and further scale its high-margin retail business, MTS Bank said in a press release.
"The plan to become a public company confirms that MTS Bank has entered a new stage of development. This will give additional momentum to the bank's profitable growth and thus make it possible to create additional value for shareholders," MTS Bank CEO Ilya Filatov said in the press release.
The bank's majority shareholder, mobile provider Mobile TeleSystems (MTS) does not plan to sell any of its shares in the IPO and will retain a majority stake in the bank after the offering.
The bank, its majority shareholder and parties affiliated with them are expected to commit to a lock-up period of 180 days from the start of trading on the Moscow Exchange. The IPO will have a stabilization mechanism for up to 30 days after the start of trading.
The IPO will be open to qualified and unqualified investors retail and institutional investors, the bank said.
"Our own expertise in retail banking and integration with the ecosystem of Russia's leading telecom provider create significant potential for the further profitable growth of the business and increasing our share of Russia's retail lending market. The bank aims in the medium term to double its loan portfolio and client base (to 8 million active clients), anticipating a gradual increase in return on equity to 30%," MTS Bank said.
MTS Bank's board of directors approved a new issue of common shares totaling up to 3.6 billion rubles in the middle of March. The bank can increase its charter capital by 3.593 billion rubles to 18.6 billion rubles with the placement of 7,187,042 new common shares with par value of 500 each. The shares can be placed in a public offering.
The maximum amount of the new issue is equivalent to about 19.3% of the bank's increased charter capital and 24% of its current charter capital.
MTS said at the time that its board had taken under advisement information about the possible reduction of the mobile provider's stake in the bank to less than 80.5% from 99.8% if the new share issue is placed in full. The board also directed MTS management to "continue measures aimed at further reducing PJSC MTS's equity stake in PJSC MTS Bank."
MTS Bank was Russia's 24th largest lender by assets at the end of 2023, according to the Interfax-100 ranking. The bank's net profit to Russian Accounting Standards rose 32% to 3.7 billion rubles in the first quarter of 2024 and its retail loan portfolio totalled 359 billion rubles.