Questions and answers about the closing the deal between UniCredit Group and the ABH Holdings, as well as the integration of the banks.

Integration of Alfa-Bank Ukraine and Ukrsotsbank 31 october 2016 - 12:01

What does the agreement between UniCredit Group and the ABH Holdings mean? 

The deal structure assumes that UniCredit Group (UCG) transfers its block of shares in PJSC "Ukrsotsbank" to ABH Holdings S.A. (ABHH) in exchange for issued shares equal to 9.9% stake in ABHH after the deal closing. Also one representative of UniCredit will join the Board of Directors of ABHH.

This means that Ukrsotsbank’s shareholders will combine the best banking experience of ABH Holdings S.A. in different European countries including CIS with the best international practices of UniCredit.

Is it true that Alfa-Bank purchased Ukrsotsbank?

It’s incorrect wording. The agreement provides that shareholders of UniCredit Group and ABHH made assets exchange. Therefore it’s not about the purchase but about exchange of assets which will result in gradual integration and merger of banks that are now part of the same banking group.

Why do you need this deal? Especially now, in times of crisis and changes at the banking market of the country.

Ukraine is strategically important country for further development of the group. Shareholders believe in economy growth and potential of the market. This is a historical and unprecedented agreement for the financial sector in terms of size, repute and importance. The agreement will result in emerging of a new, strong and reliable bank, one of the largest universal banks in the country with the strong support of two international shareholders – ABHH and UniCredit Group.

Who approved the deal?

The transaction was made in compliance with all legal and regulatory requirements. On September 8, 2016, the Antimonopoly Committee of Ukraine authorized concentration of shares for ABHH, having noted the positive effects of this concentration for the whole banking sector and that the banking system of Ukraine will receive a large and highly competitive bank, which will have a positive effect on its stability. In addition, the clients will get access to better products and services.
Also, on October 12, 2016, the National Bank of Ukraine has approved the deal between ABHH and UCG welcoming the first big M&A deal in the Ukrainian banking industry in recent years and expecting that the combination of competencies of the two international financial groups will promote the development of the banking market in Ukraine.

Why did UniCredit Group decide to leave Ukrainian market?

UniCredit Group will become minority shareholder of ABH Holdings S.A. and will continue to care about Ukrainian clients. 

CEE region has always been strategically important for shareholders of both UniCredit and ABHH. Synergy of new partnership, best practices, experience and professionalism of the teams will make the development of the two groups more effective. 

When will the agreement between two financial institutions be closed?

The closing of the deal, transfer of Ukrsotsbank shares and new members of management board appointment were announced on October 31, 2016, at Ukrsotsbank’s shareholders meeting. 

Who has become Ukrsotsbank’s new shareholder after the agreement closing?

Ukrsotsbank has become a part of ABHH, banking group of Alfa-Group international consortium with headquarters in Luxembourg. UniCredit Group is one of minority shareholders of ABHH. 

What ABHH is?

ABH Holdings S.A. (ABHH) is a private investment holding company headquartered in Luxembourg. ABHH has investments in a number of banking groups operating in Europe and the CIS area, specifically in Ukraine, Russia, Kazakhstan, Belarus, and the Netherlands.
ABHH’s owners include Mikhaіl Fridman – 36.47%, German Khan – 23.27% (both with Israeli citizenship), Aleksei Kuzmichev – 18.12%, Petr Aven – 13.76%, Andrei Kosogov – 4.08% (all three with Russian citizenship), as well as The Mark Foundation for Cancer Research – 4.30%.
ABHH operating companies have more than 30,300 full-time employees in 8 countries, serving more than 15 m retail customers, while the branch network expanded to 911 offices.

Is it true that UniCredit Bank has become a Russian bank?

No, it’s not true. Both Ukrsotsbank and Alfa-Bank Ukraine are large private banks with international capital according to the NBU classification. 

The new bank will be a part of assets of two large international business groups (Alfa-Group consortium and LetterOne investment holdings), who develop their businesses in Europe, the USA, CIS countries, South America and Middle Asia.

What will happen after the deal closing?

After the deal closing on October 31, 2016 there will be an integration process with unification and improvement of procedures, products and services. These activities will facilitate development of better practices and will allow two financial institutions to create strong team of professionals. 

Who will be head of Ukrsotsbank after the deal closing?

After the deal closing there will be a new management board with current members and new ones. Tamara Savoshchenko remains chairman of the management board.  

How will Ukrsotsbank operate after the deal closing?

The bank will operate in the regular mode providing consistently high-quality services and services to customers. The integration process will not influence the quality of products and services. The bank will keep fulfilling all obligations to other banks and clients. 

How will Alfa-Bank Ukraine and Ukrsotsbank be operating from the deal closing till the moment the integration is complete? 

Ukrsotsbank and Alfa-Bank Ukraine will operate as the two separate financial institutions. To make the integration process effective a General Integration Committee with top-managers and leading specialists of the two banks started to convene. The strategic agreement is aimed at creation of a market leader on the platform of two banks. 

What will happen to clients’ accounts, deposits and other products? Will the rates and other terms be changed? Will there be any changes for clients of the two banks? 

There will be no changes that would cause inconvenience to customers or reduce the quality of service. If there is a need for additional operations, customers will be informed by the bank.

After integration of the two banks there will be a new, strong, highly competitive player on the local market. Clients will benefit from new opportunities – a broader and more attractive product line, a large network of branches across the country, a large ATM network – all the best the two banks can offer and all the best the united team of professionals will create.

Integration of banks will help combine the best competencies and experience of all employees. This gives additional possibilities for development of new products and services, distribution channels, technologies, innovations and improvement of service standards for the benefit of both existing and new customers of two banks.

How will customers get information about integration?

Information about the integration will be available on the bank’s website. Also customers can always call the Contact Centre or visit official pages in social networks to get answers to any questions.

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