Management led by Fallico could buy Intesa Sanpaolo subsidiary in Russia - sources
MOSCOW. Nov 11 (Interfax) - Banca Intesa JSC, a Russian subsidiary of Intesa Sanpaolo Group, could be acquired by its management led by Antonio Fallico, two sources familiar with the discussions told Interfax.
The intention is to buy 100% of shares, the amount of the deal is expected to be symbolic, while Intesa Sanpaolo expects the Russian subsidiary to return about 300 million euros in funding provided to it, one of the sources said.
According to another source, the Italian group in a potential deal will retain the option to repurchase 51% of the company's shares.
Fallico is an Italian citizen, but has lived and worked in Russia for many years. He headed up the Banca Intesa board in 2003. He was president of the Association of Italian Entrepreneurs in Russia and founded the "Explore Eurasia" association.
In order for the deal to go ahead, it must get approval at the highest level: In late October, Intesa, together with several dozen other banks, was included on a list of lenders approved by Vladimir Putin from which "unfriendly" non-residents can only withdraw by special presidential permission.
The management buyout scheme, which is widely used by companies in the real sector (many assets left by foreign owners due to their exist form the market amid events in Ukraine have been transferred to their top managers), has not yet become widespread for banks. Attempts to sell assets to other market players are not always seen favorably by regulators: for example, HSBC, which signed an agreement to sell 100% of HSBC Bank to Russian Expobank back in summer, has yet to receive consent for the transaction, while officials have repeatedly made pessimistic comments regarding the prospects of such a sale (in particular, due to the application of the "mutuality" principle in connection with restrictions against "subsidiaries" of Russian banks in a number of foreign countries).
Intesa Sanpaolo and the Russian Intesa subsidiary could not be reached for comment. The Finance Ministry did not answer the question of whether an application for such a deal had been submitted to a subcommittee of the Government Commission for Monitoring Foreign Investment. The Central Bank traditionally does not comment on the actions of specific participants in the financial market.
In March 2022, the Italian group announced a strategic review of its presence in Russia. The activity of the Russian subsidiary is supervised by a special crisis division of the group. Intesa Sanpaolo has not provided any new financing to Russian and Belarusian companies since late February and does not invest in Russian and Belarusian financial instruments.
In Intesa Sanpaolo's most recent report, nothing was said about the possible sale of the bank in Russia, but the group did announce serious progress in reducing its Russian portfolio. The risk on Russia (loans to local and international clients) in Q3 2022 fell by 2.3 billion euros - to 1.3 billion euros.
According to the latest available IFRS financial statements, the assets of Russia-based Banca Intesa amounted to 75.3 billion rubles as of September 30, 2021. The gross credit portfolio stood at 48.9 billion rubles. The bulk of the portfolio (61%) consisted of loans to large corporate clients, with small and medium-sized businesses accounting for 36% and retail loans accounting for 3%.
In 2021, Banca Intesa was ranked 67th in terms of assets in the Interfax-100 ranking.
