KOMMERSANT. Negotiations over the sale of GE Money Bank, which is controlled by industrial conglomerate General Electric (GE), are in progress with as many as two contenders. One of them is private pension fund Blagosostoyanie, which recently bought Absolut Bank from Belgian group KBC, and the second one is Sovkombank. Several sources disclosed details of a possible deal to Kommersant. According to one of them, GE wants to sell the bank by the end of 2013, with Morgan Stanley being an advisor.

Sovkombank co-owner Sergey Khotimskiy said he makes no comments on rumors, but added the bank is exploring business expansion options through acquisitions. “We're interested in expanding our presence in the European part of the country and in large cities," he specified. Blagosostoyanie executive director Yury Novozhilov noted that “we're keeping an eye on good assets, GE Money Bank in particular, but have so far failed to reach accord on the price. If the seller offers a discount which suits us, we are ready to get back to the issue".

Experts believe that GE Money Bank could be of interest to the buyers, first and foremost, thanks to its network and clientele. Based on CBR data, the bank operates 53 units. As the newspaper's sources said, GE intends to sell the Russian bank for the price which at least equals the bank's capital. But the deal could be hindered by a number of additional conditions. The buyer will have to replace 100% of GE's funding. Analysts think that as of year-end 2012 the parent company's funding totaled Rub 11 bln, or 56% of the bank's liabilities excluding capital. In addition, GE Money Bank employees cannot be dismissed during a year after the deal, and this is part of GE's corporate ethics. For this reason, at issue is a discount of Rub 1.5—2 bln, i.e. 15—20% of capital.

Information about GE's aspiration to sell the Russian banks hit the media for the first time in June 2011 along with reports about the plans to sell GE's Latvian subsidiary to Otkritie Financial Corporation. At that time Kommersant sources pointed out that the US giant planned to divest all its East European banking assets. The process expedited this year after Latvian bank GE Money was sold to Swedish financial holding Marginalen AB. According to the newspaper's sources, the Russian bank is of no interest to GE due to the modest scope of business.