Press Release :: Swedbank
Swedbank has decided to discontinue its remaining operations in Ukraine and Russia and has signed a share purchase agreement regarding its Ukrainian subsidiary with Mr. Mykola Lagun, the majority owner in Delta Bank.
The transaction is expected to be completed in the first half of 2013 and is subject to regulatory approval. Swedbank’s Ukrainian and Russian operations will, as of the first quarter 2013, be reported as Discontinued Operations.
"This is the final step in our strategy to concentrate Swedbank's business activities to Sweden and the three Baltic countries. The executive management can now turn its full attention to our home markets", said Michael Wolf, President and CEO of Swedbank.
As a result of the divestment, Swedbank will report impairments in Ukraine of approximately SEK 340m under Discontinued Operations in the first quarter of 2013.
Once the sale transaction of the Ukrainian subsidiary is completed, a negative cumulative exchange difference of SEK 1.9 billion (which is due to the Ukrainian hryvnia's depreciation against the Swedish krona) will be reclassified on the income statement under Discontinued Operations. The cumulative exchange difference has previously impacted equity directly via Other Comprehensive Income, mainly from 2007 to 2009. The reclassified item will therefore at this moment not affect Swedbank’s equity, capitalisation or cash flow. Hence the reclassified item will have no bearing on the Board of Directors' 2013 dividend proposal.
Following the completion of the sale, the remaining exposure in Ukraine will comprise real estate assets managed by Swedbank’s subsidiary Ektornet with a book value of approximately SEK 600m which will be sold in due course.
Swedbank will cease all new business in Russia and wind down its existing operations. Swedbank's net lending in Russia (including leasing) is approximately SEK 2.6 billion. The lending portfolio in Russia, consisting mainly of performing corporate loans, will decrease through amortisation. Swedbank has real estate assets worth SEK 150m in Russia, which also will be sold.
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