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RIA Novosti

Russia

Russian VTB buys bank from ex-senior official in Ukraine - paper

12:03 03/11/2005
MOSCOW, November 3 (RIA Novosti) - Russia's biggest state-owned foreign trade bank, Vneshtorgbank (VTB), is buying Ukraine's Mriya bank, in an attempt to expand into the country's retail market, a respected business daily reported Thursday.

Vedomosti said Mriya, which is one of Ukraine's top thirty banks, was considered to be the property of the former chief of Ukraine's Security Council, Petro Poroshenko.

The paper cited VTB President Andrei Kostin as saying that Mriya had a network of 22 branches and 143 offices, covering nearly all of Ukraine's regions. He added that the bank's modest financial indicators had made the price very attractive, but did not reveal the exact sum. He only said Ukrainian banks had become considerably more expensive after Raiffeisen group had bought Aval bank for more than a billion dollars, four times the bank's capital.

Yury Ushkov, an analyst with Troika Dialog investment in Kiev, put the price at $80-100 million, or two or three times Mriya's capital, Vedomosti said. Yury Pikush of Ukraine-based PrivatBank said Mriya was a robust bank, but would need substantial investment to secure a leading position.

According to the paper, Kostin first announced VTB's plans to buy a Ukrainian bank in spring. On October 24, Kostin went to Ukraine to obtain President Viktor Yushchenko's approval, but refused to identify the bank upon his return.

The paper said Poroshenko, who resigned in September over corruption allegations and is now being sued for causing financial damage to as yet unnamed companies, was considered Mriya's owner. According to the information posted on the bank's Web site, four out of five members of its supervisory board are representatives of the Ukrprominvest industrial investment concern, which was founded by Poroshenko. The latter resigned as chairman of the supervisory board in 2002 after he was elected to parliament, Vedomosti said.

The paper could not reach Poroshenko for comment. But Yuriy Buglak, a member of the supervisory board, told Vedomosti he had no information about the deal.

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