OREANDA-NEWS. October 4, 2011. TransCreditBank Board of Directors at its meeting in Moscow approved the decision to increase the Bank’s authorized share capital through the placement of 334 373 607 ordinary shares with a nominal value of RUB 1. The share price was set at RUB 22.69. As a result of the additional share issue the Bank’s capital will grow by RUB 7.59 billion. The Board of Directors also approved the Decision on the Issuance and the Prospectus.

“The additional share issue is part of the Shareholders Agreement signed by Bank VTB and Russian Railways in July this year,” said Oleg Panarin, TransCreditBank’s Vice President.  “New capital injection will markedly improve TransCreditBank’s capital adequacy (according to IFRS), with Tier 1 ratio exceeding 9.5%.”

As at 1 July 2011, Tier 1 capital ratio (according to Basel Accord) was 6.6%, total capital ratio was 10.9%, and CBR N1 ratio was 11.8%. In view of a priority right of the existing shareholder, Bank VTB is expected to be the single buyer of TransCreditBank’s shares, thus increasing its stake in the Bank.

The Board of Directors also approved the Bank’s 2011-2013 development strategy and road-map of integration into VTB Group. “The strategy envisages that in the coming years TransCreditBanks maintains strong business growth of about 20% annually, while also delivering return on equity of not less than 20%. At the same time, the Bank will be preparing for the migration of corporate business to Bank VTB and of retail business to VTB-24 in terms of infrastructure alignment, branch network analysis, product and process harmonization,” said Oleg Panarin. 

In the first six months of 2011 TransCreditBank’s assets increased 9% to RUB 426.9 billion, gross loan portfolio grew 38% to RUB 297.0, net profit amounted to RUB 3.1 billion and ROE was 21.1% (according to IFRS accounts ).