A powerful Russian bank may acquire a majority stake in Volksbank International (VBI), the ailing affiliate of Volksbank AG (ÖVAG).
VBI, which manages ÖVAG’s operations in Eastern Europe (EE), had 5,362 employees in 547 branches in Romania, Slovakia and six other countries. It sustained a loss of 22.37 million Euros in 2010.
Sberbank has hinted interest in snatching up the financial institute for months. Now international and Austrian business press report that a takeover could occur as early as this month. The Russian bank, which is based in Moscow, is reportedly ready to pay 700 million Euros for VBI. Earlier this year, a sum of 1.2 billion Euros was mentioned in rumours regarding the possible sale.
VBI would match Sberbank’s ambitious expansion plans. ÖVAG – which holds a 51 per cent interest in VBI – declined to comment on reports about a nearing closure of the deal with Sberbank today (Weds).
It is understood that Sberbank would only come on board if ÖVAG kept VBI’s seriously struggling Romanian branch which is, at 1,373 employees, the largest part of the bank. VBI has 632 staff in Hungary. The Czech Republic is third in this regard (614 clerks).
ÖVAG is one of four Austrian banks that received financial support from the Republic of Austria during the economic crisis. It has received around one billion Euros since 2009. The bank managed to achieve a profit of 90.8 million Euros in 2010 after two immensely difficult years. It suffered a pre-tax loss of 943.5 million Euros in 2009.