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EBRD signs a Subscription Agreement to buy 15 percent stake in SDM-Bank


19 January 2011

EBRD signs a Subscription Agreement to buy 15 percent stake in SDM-Bank

On January 19, 2011, the EBRD and SDM-Bank have executed a Subscription Agreement whereby the EBRD shall purchase a 15 percent equity stake in SDM-Bank.

On September 14, 2010 the EBRD’s Board of Directors approved a primary equity investment in SDM-Bank. EBRD will pay up to Roubles 352 million (approximately USD 11.4 million). The newly issued ordinary voting shares will represent 15 percent of SDM-Bank’s equity capital. Concurrent with the investment, subject to an approval by a Russian government committee that reviews foreign investments, the EBRD shall have one seat on SDM-Bank's Board of Directors.

'The EBRD’s equity investment and presence on the Board of Directors will strengthen our capital base and strategic positioning. Our new partnership will enable SDM-Bank to broaden our regional reach and to enhance funding available to SMEs. SDM-Bank and the EBRD have developed and agreed an Institutional Building Plan (IBP).  The IBP is a robust strategic framework and a set of priorities for SDM-Bank’s short and medium-term development. The IBP’s principal objectives are to improve business processes, efficiency and corporate governance,’ stated Maxim Solntsev, SDM-Bank’s CEO.

'By investing in SDM, the EBRD is providing support to a strong and independent private player, which managed to weather the peak of the financial crisis while retaining both its willingness and capacity to start new lending,' said Nick Tesseyman, the EBRD’s Managing Director for Financial Institutions.

The EBRD’s equity investment is being implemented in conjunction with the two unsecured five-year loans totaling Roubles 375 million (approximately USD 12 million) made by the EBRD to SDM-Bank in Q4 2010. This funding aims to enable SDM-Bank to issue medium and long-term local currency loans. These loans will target SMEs, SDM-Bank’s core client base, as well as smaller micro businesses that represent a new business line for the bank’s activities.

For more information contact Anna Kolokoltseva, e-mail,
tel.: + 7 495 490 45 71 (direct)

JSC SDM-Bank was established in 1991. The bank has the General license of the Bank of Russia No 1637. The bank participates in the Deposit Insurance System since 2004.  SDM-Bank aims to deliver best-in-class financial services across three principal business lines:
- Corporate Lending (with a particular emphasis on SMEs)
- Corporate Cash Management (with a particular emphasis on SMEs)
- Private Client Services

The Bank has 13 full-service branches and 26 corporate offices in Moscow; 8 regional branches in Perm, Voronezh, Saint-Petersburg, Krasnoyarsk, Tver, Nizhniy Novgorod, Omsk and Rostov-on-Don and representative office in London.

As of July 1, 2010 SDM-Bank’s Net Assets were RUB 20.39 bn., Capital was RUB 2.24 bn, Balance Sheet profit was RUB 256.39mn. SDM-Bank’s number of corporate accounts exceeded 21.7 thousand and retail accounts exceeded 132.4 thousand.
In June 2010 Fitch upgraded SDM-Bank’s Long term foreign currency rating from “B-“ to “B” and national long term rating from “BB-(rus)” to “BBB(rus)”. All ratings have “Stable” outlook.

European Bank for Reconstruction and Development (EBRD) is an international financial organization that funds projects in 29 countries from Central Europe to Central Asia. EBRD was founded in 1991 with participation of 61 Governments, the European Union and European Investment Bank. EBRD supports entrepreneurship and the transition to an open and democratic market economy, by investing primarily in the private sector whose needs cannot be met by the market.