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Report: VTB Bank to reduce holding in Angolan unit

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According to Market Intelligence, April 2023


Report: VTB Bank to reduce holding in Angolan unit

VTB Bank PJSC and its partners plan to sell a 20% stake in Banco VTB Africa SA to the Angolan unit's management, news agency Prime reported Oct. 23.

VTB wants to sell 10% of the subsidiary's shares which will lower its shareholding in it to 40% from 50.1% and VTB's partners will similarly reduce their stake to 40%. The transaction could be finalized by the end of 2019, Prime said, citing VTB Bank CEO Andrey Kostin.

Banco VTB Africa's management team has significantly contributed to the robust performance of the lender, whose return on equity amounts to around 50%, Kostin noted, adding that the deal is aimed at further motivating the management.

"They were ready to buy 100% of the bank, but I decided that we need to stay in Angola," Kostin said.

The format of the planned deal offers sufficient motivation for Banco VTB Africa's management while maintaining the Russian bank's significant stake — allowing it to influence all major decisions, the report said.

Kostin told reporters Oct. 23 that VTB Bank may need a capital boost in 2020 and will consider various possibilities, including a subordinated bond issuance, to raise funds if the need arises, according to a Reuters report.