Barclays to acquire Russian bank Expobank
Barclays Bank PLC (“Barclays”) has entered into an agreement with Petropavlovsk Finance (Limited Liability Society) to acquire 100% of Expobank for a consideration of approximately $745 million (£373 million) which Barclays will finance out of existing cash resources.
Expobank focuses principally on Western Russia, with a substantial presence in Moscow and St Petersburg. Founded in 1994 it has grown rapidly and comprises a blend of retail and commercial banking, operating 32 branches and dealing with a range of corporate and wholesale clients. As at 31 December 2007, Expobank had net assets of $186m (£93m).
The acquisition of Expobank advances Barclays stated strategy of increasing its exposure over time to emerging markets with good growth characteristics. In addition to Barclays Capital’s existing successful risk management and financing business in Russia, Barclays has, within the management of Global Retail & Commercial Banking, an established team of professionals with substantial experience of operating in Russia. By 2011, we expect that the transaction will generate economic profit, will be earnings accretive and will achieve a return on investment significantly above the cost of equity.
The transaction is expected to close in Summer 2008 after receipt of appropriate regulatory approvals. Following completion, Expobank will be part of Barclays GRCB Emerging Markets business run by Ahmed Khizer Khan. Andrey V. Vdovin and Kirill V. Yakubovskiy will remain as members of the Board of Directors of Expobank. Sergey M. Radchenkov will remain as Chairman of the Management Board (equivalent to Chief Executive Officer) and will report to Ahmed Khizer Khan.
Frits Seegers, Chief Executive, Global Retail and Commercial Banking, Barclays said:
“Expobank is a well-run bank with a good track record of innovative distribution and represents a great opportunity for Barclays. Its existing relationships and infrastructure create the ideal platform for us to become one of the leading retail and commercial banks in Russia, one of the world’s fastest growing economies and a market we have been keen to enter for some time.”
Kirill Yakubovskiy, Chairman of the Board of Expobank, said:
“We are very proud that Expobank, which we created and developed, is to enter the next stage of its evolution hand in hand with one of the world’s largest banks. Becoming part of the Barclays group is the start of a new era not only for Expobank itself, but also for the Russian banking sector as a whole.”
“The professionalism and vast experience of Barclays will make an invaluable contribution to Expobank’s further development in a transaction that is beneficial for all involved. This will open new professional and career opportunities for our employees and, most importantly, will bring real benefits for our customers. Andrey Vdovin and I will stay with the bank as members of the Board of Directors and Sergey Radchenkov will remain as the Chairman of the Management Board.”
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