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FINANCIALS: RBIAV: Belarusian Sale Signed But Regulators More Important

FINANCIALS
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Raiffeisen (RBIAV: Baa2) has announced the signing of the deal to sell its Belarussian business. Should be a minor spread positive due to the simplification, but this remains subject to regulatory approvals, which is the key term, we feel. Until such approvals appear likely, we can’t see these tightening spreads and the process in Russia remains far more important overall.

  • RBI announced negotiations with Soven 1 Holdings in Feb-24 for the sale of Priorbank JSC, RBI’s business in Belarus. This is separate from its now-forlorn efforts to sell its business in Russia, which has come up against EU and US regulatory pressure and appears near-certain to fail.
  • The impact on RBI’s CET1 ratio is seen as 5bp negative on deal closure – no information is immediately available about the ongoing earnings/profitability impacts, but we expect these to be limited. This should be a minor spread positive on simplification.
  • However, “subject to regulatory approvals” remains the key phrase to us in the release. The sale of the business in Russia was at a similar stage when political pressure was brought to bear. Belarus is not Russia but appears aligned thereto, so the risk of failure here is relatively high, in our view.
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Raiffeisen (RBIAV: Baa2) has announced the signing of the deal to sell its Belarussian business. Should be a minor spread positive due to the simplification, but this remains subject to regulatory approvals, which is the key term, we feel. Until such approvals appear likely, we can’t see these tightening spreads and the process in Russia remains far more important overall.

  • RBI announced negotiations with Soven 1 Holdings in Feb-24 for the sale of Priorbank JSC, RBI’s business in Belarus. This is separate from its now-forlorn efforts to sell its business in Russia, which has come up against EU and US regulatory pressure and appears near-certain to fail.
  • The impact on RBI’s CET1 ratio is seen as 5bp negative on deal closure – no information is immediately available about the ongoing earnings/profitability impacts, but we expect these to be limited. This should be a minor spread positive on simplification.
  • However, “subject to regulatory approvals” remains the key phrase to us in the release. The sale of the business in Russia was at a similar stage when political pressure was brought to bear. Belarus is not Russia but appears aligned thereto, so the risk of failure here is relatively high, in our view.