Dec. 20 (Bloomberg) -- Erste Group Bank AG, eastern Europe’s third-biggest western lender, agreed to sell its bank in Ukraine, booking a final 151 million-euro ($201 million) loss on its only unit in the former Soviet Union.
Erste will sell Erste Bank Ukraine for $83 million to the owners of Fidobank, a group of companies controlled by Aleksandr Adarich, the bank said in a statement today. That’s below the unit’s book value, causing a 71 million-euro loss this quarter. Another 80.4 million-euro loss caused by devaluation of the Ukrainian hryvnia will be booked when the deal is closed, according to the statement.
The sale “is consistent with Erste Group’s focus on customer business in the eastern part of the European Union,” the Vienna-based lender said in the statement, adding that it expects the closing in 2013.
Chief Executive Officer Andreas Treichl flagged a possible sale of the Ukraine business when he told shareholders in May that the business was in “a grave situation” and finding a solution was high on his agenda. The deal concludes a costly experiment for Erste, which owns the biggest banks in the Czech and Slovak republics and in Romania, and the second-biggest in Hungary.
Erste lost money in Ukraine since it bought the lender, then named Bank Prestige, for $104 million in a two-stage deal completed 2007. Including the net loss in the first nine months of 2012, losses totaled 217.5 million euros, according to Bloomberg News calculations based on Erste’s annual reports.
Erste’s Austrian peer Raiffeisen Bank International AG owns Ukraine’s fourth-biggest lender, Bank Aval.
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