PPF, one of the leading CEE-based investment groups, has agreed to sell its Russian banking assets including its leading consumer lender Home Credit to a group of investors led by Ivan Tyryshkin, chairman of the fintech SPB Exchange.
"My partners and I have bought 50% plus one share, for now we are not disclosing more information," Tyryshkin was quoted as saying by Frank Media, a Russian banking focused publication, Reuters reported.
Tyryshkin is chairman, a leading shareholder and one of the founders of Russia’s SPB Exchange, one of the leading publicly traded fintech platforms in the region. Previously he was CEO of the RTS Stock Exchange, which merged to form the Moscow Exchange in 2011.
PPF – one of the biggest foreign private investors in Russia – had been trying to sell its Russian and Kazakh assets before the Kremlin’s invasion of Ukraine, with Hungary’s OTP bank and Russia’s AFK Sistema reported as being potential buyers.
A deal was reportedly held up by the explosion of unrest in Kazakhstan at the start of January. The Kazakh assets are now being sold separately to shareholders and top managers of PPF and Home Credit.
The Russian invasion on February 24 has undoubtedly significantly reduced the valuation of PPF’s Russian assets, though no financial information was disclosed about the sale.
PPF said on February 28 that its Russian net assets were at that time valued at around €1bn, some 10% of its total net assets. The group has subsequently disposed of all of its Russian residential real estate, and is in the process of selling its agricultural businesses in Russia, according to Russian media.
Many European banks are scrambling to exit the Russian market, but the only other major sale so far has been made by Societe Generale of France.
Before the sale, PPF had total assets of €40bn, mainly in finance, telecoms and the media, spread across Central Europe, Russia, China and the Far East.
PPF was founded by the late billionaire Petr Kellner and is now controlled by his widow Renata. Even before Kellner’s death in March 2021, PPF had been trying to wind down its investments in Russia and Asia to refocus on more developed markets, diversifying its portfolio and stabilising its returns.
The sale follows the appointment of Jiri Smejc, a shareholder and chairman of Home Credit, as PPF’s new chief executive, although he does not officially take over until next month. Smejc had previously been head of Home Credit and then of all PPF’s operation in Russia in the late 2000s, transforming the group into one of the biggest foreign private investors there. Home Credit had entered the Russian market in 2002.
There is also speculation that PPF is targeting disposals of Home Credit’s Asian operations in India, Vietnam, Indonesia and the Philippines. Bloomberg has reported that those assets could be worth up to $2.5bn. Some observers believe the China business could also eventually be put up for sale, given Home Credit's financing problems there following the Communist regime's liquidity squeeze to cool the economy down.
In November 2019, Home Credit dropped a plan for a $1.5bn initial public offering (IPO) in Hong Kong because of poor market conditions. The IPO had been designed to turbocharge Home Credit's Asian growth. Subsequently, China’s slowing economy, liquidity squeeze and strict COVID-19 lockdowns have damaged PPF's business there.