Isbank to Acquire Sofia

Mavi Boncuk |
Leading Turkish lender Isbank is close to closing a deal worth $40m to acquire Sofia, a Russian commercial bank.

The deal would be the first acquisition by a strategic investor of a Russian bank since the financial meltdown struck in late 2008, according to UniCredit Securities, which advised the seller. Victor Timotin, head of financial institutions group at UniCredit, said such small deals present a good entry point for foreign banks looking to follow their corporate clients into Russia and as a platform for corporate banking.

Timotin said such deals can be priced at a premium because small institutions often have “reasonable quality and manageable portfolio.” For larger transactions he added: “Pricing of banking equity will be lower, as most strategic buyers are unwilling and unable to carry large amounts of goodwill on their books. Thus, for larger Russian banks and their shareholders, the IPO route is likely to remain the only viable way of raising capital and cashing out in the nearest future.” The deal is expected to be closed after the approval from the relevant Russian and Turkish regulatory bodies.

The international network of İşbank is composed of one branch in the United Kingdom, one branch in Bahrain, 13 branches in The Turkish Republic of Northern Cyprus, two financial subsidiaries in the Republic of Ireland (İş Dublin Financial Services plc) and Germany (İşbank GmbH with 11 branches in Germany and one branch each in the Netherlands, France and Switzerland) and a representative office in Shanghai.