10 Dec 2009 19:19

Lukashenko approves sale of BPS Bank to Sberbank Russia for $280.7 mln

MINSK. Dec 10 (Interfax) - Belarusian President Alexander Lukashenko has approved the sale of BPS Bank to Sberbank Russia for $280.73 million.

According to the text of the presidential decree (N618), Sberbank will purchase 835.504 million BPS Bank shares for $0.336 each in 2009.

The decree also approves the investment agreement between Belarus and Sberbank and the letter concerning the commitments made by the Belarusian side.

The proceeds from sale of BPS Bank will be allocated to the National Development Budget Fund.

The documents on acquisition of BPS Bank have still not been signed, said Sberbank Deputy CEO Ilkka Salonen, who is leading negotiations with Belarus. "I am flying to Minsk tomorrow, where all the documents on purchase of BPS Bank will be signed," he said.

Salonen did not comment concerning the deal's cost.

The Belarusian Council of Ministers told Interfax that the purchase agreement would be signed at 10:00 a.m. Minsk time (11:00 a.m. Moscow time) on Friday together with an investment agreement between Belarus and Sberbank and a letter on the acceptance of obligations by Belarus.

It was reported earlier that the negotiations dragged on throughout 2009. Initially Sberbank expected to pay $150 million for BPS based on a valuation performed by Deutsche Bank. Belarusian officials wanted $450 million for the bank based on a valuation performed by a state organization.

Later, UK investment bank NM Rothschild & Sons carried out an appraisal utilizing three scenarios - optimistic, basic and pessimistic - that valued the bank in the range $150 million-$500 million.

BPS Bank was founded in December 1991. The State Property Committee owns 93.3% of shares and the overall state stake is 95.9%. The bank has a total of 18,102 corporate and individual shareholders.

Bank assets rose 10.2% to 4.673 trillion Belarusian rubles (Br) in January-September 2009. Bank capital increased 12.2% to 625.2 billion Br. The capital adequacy ratio was 16.1%, the return on average equity indicator (ROAE) was 17.5% and the return on average assets (ROAA) was 2.3%. The ratio of income producing assets to total assets was 87.5% and the cost-to-income ration was 50.4%.

Bank charter capital totaled 416.5 billion Br.

The official exchange rate on December 10 was 2,859 Br/$1.