Raiffeisen Bank International AG (RBI) has agreed to sell the core banking operations of Raiffeisen Bank Polska S.A. by way of demerger to Bank BGZ BNP Paribas S.A., a subsidiary of BNP Paribas S.A. (BNP).
The sales price is approximately €775m, equating to a preliminary price/tangible book value multiple of around 0.95 times. This is based on the tangible book value of the core banking operations of approximately €815m as of 31 December 2017 and is subject to closing accounts.
A positive impact of approximately 90 basis points on the RBI Group’s CET1 ratio (fully loaded) based on 31 December 2017 figures is expected as a result of the sale. The direct impact of the sale on the RBI Group’s consolidated profit is expected to be around minus €120m, excluding any potential effects from deconsolidation.
Under the terms of the agreement with the buyer, total assets of approximately €9.5bn and total risk-weighted assets of approximately €5.0bn as of 31 December 2017 have been allocated to the core banking operations.
RBI intends to transfer the remaining Raiffeisen Bank Polska S.A. operations, mainly comprising the foreign currency retail mortgage loan portfolio, to a Polish branch of RBI which is to be established. Total assets of approximately €3.5bn and total risk-weighted assets of approximately €5.0bn as of 31 December 2017 have been allocated to the retained operations.
The transaction will be completed in several technical steps. First, the purchase of shares in Raiffeisen Bank Polska worth about 45% of its share capital by BNP. As a result, the spin-off and transfer of the core banking business to BGZ BNP Paribas S.A.
In connection with the spin-off, RBI and BNP will participate in a capital increase of BGZ BNP Paribas S.A. take part. Accordingly, RBI will transfer those shares of BGZ BNP Paribas S.A. in the amount of 9.8% of the share capital. These shares are subsequently acquired by BNP or a third party. In the final step of the transaction, BNP’s ownership of Raiffeisen Bank Polksa will be terminated. Following the spin-off, RBI is the sole shareholder of the remaining Raiffeisen Bank Polska S.A.
The transaction is expected to close in the fourth quarter of 2018 subject to regulatory approvals. With this transaction, RBI’s commitment to the Polish regulator PFSA to list the shares in Raiffeisen Bank Polska S.A. on the Warsaw Stock Exchange is deemed to be fulfilled.