Soven 1 Holding Completes Acquisition of Priorbank

Raiffeisen Bank International AG (RBI), one of the Austria’s leading corporate and investment banks which operates as a universal bank in 11 Central and Eastern European markets, on Monday said that it has closed the sale of Priorbank and its subsidiaries to the UAE-based investor Suhail Al Otaiba’s Soven 1 Holding.

Otaiba is the CEO of Abu Dhabi investor Talc Investment and bought 87.7% shares in Priorbank. The Belarus transaction is subject to regulatory approvals and with closing expected by end of this year.

RBI CEO Johann Strobl said that the deal, which was announced in February 2024 and signed in September 2024, was an important step in the Bank’s commitment to de-risk its exposure to Eastern Europe.

“At the same time, RBI is grateful to its colleagues at Priorbank for their commitment throughout the sales process, and for the excellent service delivered to RBI’s customers in Belarus since 2003,” he said.

RBI has been a lifeline for millions of Russian customers who were sending euros or dollars abroad, although it has recently curtailed such services since August this year.

Negative Impact

The transaction will have an effect of minus 5 basis points on the CET1 ratio of RBI Group excluding Russia at the end of 2024, resulting from the difference between the proceeds of the sale and the book value of the equity.

There is an approximately $334 million negative impact to the income statement, recognised under gains/losses from discontinued operations, of which around $504.75 million have previously been deducted from Group equity and result from the reclassification of other comprehensive income items.

Priorbank, one of Belarus’s largest banks by assets, has been operating in Belarus since 1989 and became part of RBI in 2003.

The move by UAE investors may be a trend for other, Russia-friendly investors to start picking off politically undesirable European-owned assets as sanctions threats now equate to discounted asset values. This illustrates that knock down M&A bargains are available in the Russian and CIS region.  

According to media reports, RBI’s core business has been built up over decades in developing financial services in the Commonwealth of Independent States (CIS) markets, yet it was under intense political pressure to pull out of the Russian and other related markets by both the European Union and regulators in the US, both who have threatened to sanction Raiffeisen if it does not comply.