RBI reports it has not decided on sale of Bank Aval

There is no intention and no resolution to sell Raiffeisen Bank Aval (BAVL UK), Raiffeisen Bank International (RBI AV), the owner of Aval’s 96% shares, stated in its release on November 18. At the same time, RBI confirmed that it has been approached by “various parties” with offers to sell the Ukrainian bank, but the only purpose of dialogue with such parties is to understand the price at which the bank could be theoretically sold. On the other hand, RBI stated in the release it does not rule out that it will exit the Ukrainian market, as well as the markets of Slovenia and Hungary, which are currently “under special review.”

Alexander Paraschiy: The latest release is a consequence of mass media reports about the possible sale of Bank Aval, initiated by the Friday statement of RBU CEO Karl Sevelda that RBU may sell its Ukrainian affiliate, which is located outside the core region of RBU activity. Meanwhile, Aval was a top performer on the Ukrainian stock exchange yesterday, gaining 4.6%, most likely on Sevelda’s statements.

The RBU release does not contradict what Sevelda had said and rather looks like an attempt to bargain for better pricing for Aval. The bank’s 11x yoy increase in profit in 9M13 may be another sign of the bank’s wrapping for better pricing. Meanwhile, we see the current market is not the best time to sell banks in Ukraine, so we estimate the likelihood of a deal as low.