The Antimonopoly Committee of Ukraine (AMKU) approved the acquisition of 75.4% of Kiev-based OJSC Ukrainian Innovation Bank (Ukrinbank) by Bank Hapoalim (TASE: POLI; LSE:80OA). Hapoalim now needs the approval of the Bank of Israel and the National Bank of Ukraine.
In December 2007, Bank Hapoalim agreed to buy the stakes of Ukrinbank's controlling shareholders Sergey Krivosheya and Sergey Rys, each of whom owns 37.7% of the bank, for $136 million, giving a company value of $180 million. The acquisition was made at a capital multiple of 2:1.
When the acquisition is closed, Bank Hapoalim will inject $80-100 million into Ukrinbank in order to boost its shareholder's equity to $170 million. Hapoalim will then seek a partner to buy 15% of the bank. The acquisition will enable Hapoalim to serve as a banker for Israeli companies that are entering or expanding their business in the growing Ukrainian economy.
Ukrinbank, founded in 1989, is one of Ukraine's oldest banks and its oldest private bank. The bank is ranked 43rd of the country's 150 banks. Ukrinbank had $280 million in assets, with $85 million in shareholders' equity at the end of the third quarter of 2007. The unusually high ratio makes rapid growth possible.
Ukrinbank posted a profit of $1.9 million in January-September 2007, giving a zero return on equity, which accounts for the bank's low capital multiple. It has more than 80,000 customers, of whom 23,000 are business clients, and has a strong presence in the areas of credit cards and ATMs. The bank's core business is small and medium-sized enterprises (SME) and with private customers, via a network of 30 branches and more than 100 additional sales points located in 24 of 25 provinces in Ukraine.
The acquisition of Ukrinbank is part of Bank Hapoalim's global expansion strategy led by chairman Dan Dankner and CEO Zvi Ziv. Last year, the bank acquired JSC Demir Kazakhstan Bank (DKB) for $56 million, and SDM Bank in Russia for $115 million, after earlier acquiring Turkey's BankPozitif Credi Ve Kalkinma Bankasi AS. Hapoalim is also in negotiations to acquire the controlling interest in Greece's Proton Bank SA (Athens: PRO) for $350 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2008
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