Withdrawal is targeted

RBI gets deal for Belarus subsidiary off the ground

Raiffeisen Bank International (RBI) has finalized the sale of its Belarusian subsidiary Priorbank JSC to the Emirati Soven 1 Holding. An agreement on the sale of the 84.74 percent stake was signed, as the bank announced on Friday. 

This concludes the negotiations, but the authorities still have to approve the deal. The sale will have a negative impact of around 300 million euros on the Group result.

According to the bank, which expects the deal to be closed in the fourth quarter, the amount will become effective upon completion of the transaction and is calculated from the difference between the book value of the equity and the expected purchase price. In addition, the sale is expected to have a further negative effect of a further EUR 500 million, which will primarily result from the "reclassification of predominantly historical currency losses", which will be recognized in other comprehensive income until the closing. The Belarusian rouble has suffered massive losses against the euro since 2011.

Deal would fix withdrawal from Belarus
The background to this is that although currency devaluations are reflected as a capital effect on an ongoing basis, they are not reflected in the income statement. With the sale, the currency losses would have to be offset once in the income statement, an RBI spokesperson had already explained in the spring.

With the sale, RBI is completely exiting the market in Belarus and thus further reducing its risk in the Eastern European region, according to the bank. Both the European Central Bank (ECB) and the US authorities have exerted great pressure on RBI in recent months to reduce or abandon its business in Russia and Belarus. RBI is currently reducing its business in Russia, but was recently prohibited from selling by a Russian court by means of a temporary injunction.

RBI holds 87.74 percent of Priorbank JSC, in which the Austrian Raiffeisen Group has held a stake since 2002. In the 2023 financial year, the RBI subsidiary posted a profit of 112 million euros.