OREANDA-NEWS. July 19, 2011. JSC “Russian Railways” and JSC VTB Bank today signed a shareholder agreement and sale and purchase agreement for a 54.39 percent stake in TransCreditBank, of which the 29.39 percent share is to be acquired by VTB Bank by the end of July 2011. VTB will pay RUB 16 billion, or around USD  570 million, for the 29.39 percent stake and may purchase the remaining share from Russian Railways from July 1, 2012 to December 31, 2013.   

VTB Bank’s status of a controlling shareholder and strategic investor has a crucial importance for TransCreditBank’s further development and achievement of its targets. In particular, it will lead to increased capitalization of TransCreditBank, lower cost of funds, and improved sales effectiveness, which will enable the Bank’s management team to maintain high growth dynamics of key financial and business indicators.

As a result of the deal, VTB Bank becomes a strategic partner of Russian Railways. Russian Railways keeps 25%+1 share of TransCreditBank, continues to participate in management of the Bank and remains its key client.

TransCreditBank is a top-15 Russian bank by assets. As at December 31, 2010, total assets were RUB 390.9 billion (under IFRS), gross loans to customers were RUB 215.8 billion, customer accounts were RUB 276.5 billion, and total equity amounted to RUB 28.2 billion. In 2010, the Bank earned RUB 7.5 billion in net profit; ROE was 31.9%. As at December 31, 2010, Russian Railways held a 54.39% stake and Bank VTB held a 43.2% stake of TransCreditBank.

In the first six months of 2011, the Bank’s corporate loan portfolio grew by 45%, retail portfolio – by 13%, according to preliminary stand-alone management accounts. In 2011, TransCreditBank expects to earn a net profit of over RUB 8 billion (under IFRS).