Support The Moscow Times!

Sberbank 'Agrees' to Pay $850M for VBI

VIENNA — Sberbank has agreed to buy VBI, the Eastern European arm of Austrian lender Oesterreichische Volksbanken, for 585 million euros ($850.3 million), sources close to the transaction said Monday.

The price is at the low end of a range that was drawn up in a preliminary accord struck in July.

"The binding agreement was signed. Now it must be approved by VBI's shareholders," one source close to the deal said.

Volksbanken has a 51 percent stake in VBI, while France's Banque Populaire Caisse d'Epargne and Germany's DZ Bank/WGZ Bank each own 24.5 percent.

Sberbank and Volksbanken declined to comment.

Sberbank's acquisition of VBI aims to secure a platform for Russia's largest bank to expand into Europe.

It would help Volksbanken — which failed a European bank stress test in July — to shore up its balance sheet as it seeks to repay state aid it got from the Austrian government during the financial crisis.

The Vienna-based lender said last week that it was unlikely to pay a 2011 dividend, raising prospects that it could be the third Austrian bank to be nationalized.

The VBI deal would be Sberbank's second purchase this year after its $1 billion takeover of Troika Dialog.

The purchase will open the door to Sberbank's expansion outside the former Soviet Union as it prepares to earn about 5 percent of net profit from international operations by 2014.

Sberbank, whose assets of more than $310 billion account for a third of the Russian banking system, also operates in Kazakhstan, Belarus and Ukraine. It has said it is also interested in entering Turkey and Poland.

Read more

Independent journalism isn’t dead. You can help keep it alive.

As the only remaining independent, English-language news source reporting from Russia, The Moscow Times plays a critical role in connecting Russia to the world.

Editorial decisions are made entirely by journalists in our newsroom, who adhere to the highest ethical standards. We fearlessly cover issues that are often considered off-limits or taboo in Russia, from domestic violence and LGBT issues to the climate crisis and a secretive nuclear blast that exposed unknowing doctors to radiation.

Please consider making a one-time donation — or better still a recurring donation — to The Moscow Times to help us continue producing vital, high-quality journalism about the world's largest country.