Raiffeisenbank International's CEO, Herbert Stepic, says he intends to use the profits from Raiffeisen's successful IPO on April 21 to bid for Aval Bank, the second-biggest bank in Ukraine. He says: "We are in good negotiations with the owners [private Ukrainian investors] and we hope to come to terms by the start of June." The deal would be one of RZB's largest acquisitions in eastern Europe. Aval Bank has the largest retail banking business in Ukraine, with total assets of €1.5 billion.
Raiffeisen has the cash to buy it thanks to its record-breaking IPO, the biggest ever in Austria. The deal was priced at €32.50, near the top end of initial price talk of €27 to €33, and the shares had risen to €42.60 by mid-May.
The deal values Raiffeisen International at a P/E ratio of 14, compared with Erste Bank's 12.6 and Bank Austria's 14.3.
Bank Austria and Erste Bank also have a large exposure to eastern European markets. However, Maciej Szczesny, banking analyst at Morgan Stanley, says: "RZB International is a slightly different play to Erste Bank or Bank Austria, because RZB is more adventurous than either of them.