Another French Banking Acquisition In Ukraine.

On March 24, 2006 France’s Credit Agricole agreed to pay USD 254 mln for a 98% stake (USD 260 mln for 100%) in Index Bank, #21 in Ukraine in asset terms. Concorde Capital: It seems the prices paid for Ukrainian banks will continue to remain high. If we use Index Bank’s reported book value for 2005, USD 36.5 mln, this would translate into a P/B of x7.1. However, we assume that the acquisition agreement may have included a share issue  that will bring the real price of the deal close to P/B x4. To date the price Italy’s Banca Intesa recently agreed to pay for Ukrsotsbank, the fourth-largest Ukrainian bank: USD 1.16 bln for 88% stake, P/B x5.0 is the largest price ever paid for a Ukrainian bank. We expect foreign banks to continue their spending spree in Ukraine for the next 1-1.5 years bringing their share in Ukraine’s banking capital from current 28% to 40-45% by 2007-end.