VEDOMOSTI. MDM Bank co-owner Igor Kim is to buy MDM Bank’s subsidiary bank in Latvia. two acquaintances of the banker told business daily Vedomosti that Igor Kim is eying LTB Bank (Latvian Trade Bank). LTB management board chairman Armands Steinbergs confirmed the bank’s acquisition by Igor Kim, but did not specify either the transaction price or the form of the transaction.
“Igor Kim asked me to stay at the bank for a while," says Steinbergs adding he will stay at the bank for two months to help a new management team, invited his former inferior who worked in the Latvian banking supervisory body to take his seat.
The Latvian media (Nozare.lv and biznes.delfi.lv) write that management board member Maris Avotinysh will head up the bank starting September.
LTB Bank’s assets are 15x lower than MDM Bank’s, merely Rub 25.8 bln. Steinbergs thinks that currently the bank is a very alluring asset: “this is one of the few Latvian banks that reported profit in 2010 and 2009”.
LTB has always developed on an autonomous basis, reminds a former MDM Bank executive adding “initially the bank dealt with customers engaged in tolling, and also made settlements, until now large holdings have held balances at the bank, but since then the Latvian legislation has changed drastically, so today this is a small profitable and clean bank”.
Igor Kim only said that these are just rumors, and neither confirmed nor denied interest in LTB Bank. MDM Bank spokeswoman Victoria Abramenko said the lending institution won’t comment on the Latvian bank’s sale. The Russian newspaper was also unable to receive comments fr om Latvia’s Committee for the Finance and Capital either.
As business daily Vedomosti notes, at the end of 2008 Sergey Popov and Igor Kim decided to merge MDM Bank and URSA Bank. Igor Kim took the helm at the merged MDM Bank. In accordance with the shareholder agreement Igor Kim ceased his participation in operating management in July 2010. In summer Igor Kim also left the board of directors.
The shareholder agreement signed by Igor Kim and Sergey Popov assumes that at shareholder meetings of the merged MDM Bank they will vote only together, making arrangements on a decision beforehand through a company to which they will assign their shares. The partners’ equity stakes in it will be equal to those held in the bank (53% held by Sergey Popov and 11% by Igor Kim). Within five years neither Sergey Popov nor Igor Kim can pull out of the bank’s shareholders.
Bankers have long spoken about the sentiment of Igor Kim and Sergey Popov. The acquisition of LTB Bank is part of Igor Kim’s plan to part with Sergey Popov, a banker heard. Another banker knows that lawyers of Sergey Popov and Igor Kim explored the possibility of dissolving the agreement.
The Latvian bank will be helpful to roll out services to manage major capital, thinks Corporate Finance Bank analyst Maxim Osadchy: this will be an addition to the activities carried out by Orient Express Bank wh ere Igor Kim holds a stake. It is difficult to merge banks operating in Russia and Latvia, but they could easily operate within a group.
