Published: March 13, 2009
Standard Bank is entering into a strategic partnership with Troika Dialog, one of the biggest investment banks in Russia. Standard intends to become a 33% shareholder in Troika.
The deal will initially comprise a US$200mn convertible loan extended by Standard Bank’s international operations to the Troika Dialog Group. This loan, together with the acquisition by Troika of Standard’s existing operation in Russia, ZAO Standard Bank, is convertible into a 33% equity stake in the merged entity. The combined operation will have a capital base in excess of US$850mn.
Commenting on this transaction Ruben Vardanian, chairman and CEO of Troika, says: “We are happy that our relations with Standard Bank are heading to a new level.” Vardanian is the largest shareholder in Troika and he retains a controlling stake in the new outfit.
Standard Bank says in a statement that the “combined operation will have a capital base in excess of US$850mn and will be strongly positioned to compete in the Russian financial services sector”.
In support of this development, the bank has announced two new management appointments. Peter Ghavami will join as president and CEO of ZAO Standard Bank in Moscow. Ghavami will be responsible for continuing the build out of the bank’s platform in Russia and ensuring that the group’s banking businesses in Russia are developed within the new partnership with Troika Dialog. He joins from Lehman Brothers where he was head of capital markets for Russia and CIS.
Yury Voicehovsky, current president and CEO of ZAO Standard Bank, Russia, will take up the position as chairman of the board of directors of ZAO Standard Bank. Ruben Vardanian will retain the role of chief executive of Troika.
Troika remains one of the few major investment banks in Russia which is still independently controlled. UFG sold out to Deutsche Bank in 2005, Aton Capital sold to UniCredit one year later while Troika’s main rival, Renaissance Capital, was forced to sell a 50% stake to Onexim in late 2008 for US$500mn.
“They are saying that they are not running out of capital," says Karine Hirn, partner and CEO of East Capital, the East European asset manager. "But there is less flow than in general. They must have made losses on trading but they are not known as being an institution in any kind of danger. There is a difference to the deal with Renaissance last September, which was the peak of the crisis. This was more of a venture situation. I don’t think it’s the case for Troika," says Hirn.
Troika’s owner, Ruben Vardanian, has long resisted takeover offers from Russian and foreign banks, including VTB, Credit Suisse and JPMorgan. Most recently, it has been rumoured Sberbank would take over the firm.
However, Vardanian insisted he wanted to retain control of the bank and was more interested in pursuing strategic partnerships. With this deal, he has achieved that aim.
Troika Dialog is a brokerage and investment bank that operates across the CIS. It operates in capital markets (stock broking), investment banking, asset management, private equity investments and personal investments and finance. It is primarily focused on Russia and other CIS markets.
Standard Bank Group is the largest African banking group by assets and earnings, which operates in 17 African countries and 20 emerging countries outside of Africa, including Russia, Brazil, and China.