Russia’s largest savings bank, Sberbank, is to provide 300 million euros to beef up the capital of its recently acquired Austrian lender Volksbank International (VBI), Sberbank CEO German Gref said on Thursday.
“This is our wholly-owned subsidiary company and we’ll engage in its recapitalization in compliance with the necessary requirements. I believe this will take place in the near future,” Gref said.
The bank’s recapitalization will help Sberbank develop its business in Central and Eastern Europe and Austria.
Sberbank will inject the cash into VBI, which will eventually be distributed among the group’s banks.
“We’ll add capital to VBI and this capital will be distributed among the capital of [the group’s] banks depending on their requirements. Overall, 300 million euros will be spent for this purpose this year,” he said.
Sberbank acquired 100 percent of Volksbank International, an Eastern European subsidiary of Austria's Oesterreichische Volksbanken AG banking group, for 505 million euros in early 2012 in order to further expand into Europe.
Excluding VB Romania, VBI has 295 branches and over 600,000 clients. VBI’s subsidiaries are within the top ten financial institutions by total assets in Bosnia and Herzegovina, Croatia, the Czech Republic, and Slovakia, and within the top 15 financial institutions by total assets in Hungary, Serbia and Slovenia.
Sberbank plans to develop VBI as a banking institution to provide services to corporate customers, which requires permission from the Austrian regulator.
