Promsvyazbank might acquire stake in Baltic Leasing - paper

MOSCOW. June 20 (Interfax) - Promsvyazbank (PSB) might acquire a stake in Baltic Leasing, national daily Kommersant reported on Thursday, citing sources.

Baltic Leasing's owner has been forced to look for a buyer due to the company's high debt burden amid continued high interest rates in Russia. The sale of a stake could improve the company's financial position, one of the paper's sources said.

Baltic Leasing Group was sold by Trust Bank to a company called Profitable Investments last October for 26.928 billion rubles. Profitable Investments is owned by Mikhail Zharnitsky and his stake is pledged as collateral to PSB, the Unified State Register of Legal Entities showed. PSB financed the purchase of the leasing company, so a stake in it might be transferred to the bank to offset the debt.

Baltic Leasing Group includes flagship JSC Baltic Leasing, and its subsidiaries Baltic Leasing LLC (operating company) and Baltleas Technologies LLC, which consolidates the group's information technology operations.

Baltic Leasing was Russia's seventh largest leasing company by new business and ninth by current portfolio at the end of 2023, with respectively 144.5 billion rubles and 238 billion rubles, according to an Expert RA ranking. The company's main business is leasing equipment, automobiles and specialized vehicles. The company has been operating since 1990 and has 79 branches throughout Russia.

PSB is developing its own leasing business through PSB Leasing, which was ranked 13th by new business with 50 billion rubles and seventh by current portfolio with 350 billion rubles in the same ranking.

PSB is a state-owned bank that services major government defense and other contracts. The bank was Russia's fifth largest by assets at the end of the first quarter of 2024, according to the Interfax-100 ranking.