DNB Sells Russian Operations to Asokerco to Boost Profitability

DNB ASA (DNB), Norway’s largest bank, agreed to sell its Russian operations to streamline its business as it seeks to boost profit and raise capital.

JSC Commercial Bank DNB Bank will be sold to Asokerco Trading Limited LLC, owned by the majority shareholder in B&N Bank JSC, Mikail Shishkhanov, Oslo-based DNB said in an e-mailed statement. While the terms of the transaction aren’t disclosed, the deal may have a “very small” negative effect on second quarter results, spokesman Thomas Midteide said by phone.

“The sale is in line with DNB’s strategy to focus its operations, optimize the use of capital and increase profitability,” DNB said. “Through this acquisition, B&N Bank will establish a footprint in Murmansk adding to its expanding outreach across the Russian Federation.”

The lender is raising its capital levels to comply with stricter requirements. The bank said in February that it had increased its Tier 1 capital by 12.4 billion kroner ($2 billion) during the last 12 months and expects “a further increase of more than 40 billion kroner will be required towards 2016.”

The transaction remains subject to the relevant regulatory approval, according to DNB. Societe Generale SA acted as financial adviser to DNB.

The sale process was started before the current turmoil stemming from the crisis in Ukraine and is part of a broader strategy to sell assets, Midteide said.

To contact the reporter on this story: Stephen Treloar in Oslo at streloar1@bloomberg.net

To contact the editors responsible for this story: Christian Wienberg at cwienberg@bloomberg.net Jonas Bergman

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.