39. Principal Subsidiaries
The table below provides details on principal subsidiaries of the Bank as at 31 December 2012:
| Name | Nature of business | Percentage of ownership, % | Country of registration |
|---|---|---|---|
| Subsidiaries: | |||
| DenizBank AS | banking | 99.85 | Turkey |
| Sberbank Europe AG (former Volksbank International AG (“VBI”)) | banking | 100.00 | Austria |
| OJSC BPS-Sberbank (former OJSC Belpromstroy Bank) | banking | 97.91 | Belarus |
| SB JSC Sberbank | banking | 100.00 | Kazakhstan |
| JSC Sberbank of Russia | banking | 100.00 | Ukraine |
| Sberbank (Switzerland) AG (former SLB Commercial Bank AG) | banking | 99.15 | Switzerland |
| BNP Pariba Vostok LLC | banking | 70.00 | Russia |
| CJSC Sberbank Leasing | leasing | 100.00 | Russia |
| LLC Sberbank Capital | finance | 100.00 | Russia |
| Troika Dialog Group Ltd. | finance | 100.00 | Cayman islands |
| CJSC Rublevo-Archangelskoe | construction | 100.00 | Russia |
| LLC Sberbank Investments | finance | 100.00 | Russia |
| LLC Aukсion | services | 100.00 | Russia |
| OJSC Krasnaya Polyana | construction | 50.03 | Russia |
| LLC Khrustalnye Bashni | construction | 50.01 | Russia |
In September 2012 the Bank completed the acquisition of 99.85% of DenizBank AS (DenizBank) following the entering into the sale and purchase agreement in June 2012 with the shareholders of DenizBank — Dexia NV/SA and Dexia Participation Belgique SA (together “Dexia”). DenizBank is ranked 6th among private and 9th among all Turkish banks by consolidated total assets. The deal represents a major step in the implementation of the Group’s strategy and allows the Group to enter the fast-growing Turkish banking market.
Consideration paid by the Bank amounted to 6.5 billion TRY. Payments were performed in Euro at the exchange rate as of the date of payment. In December 2012 the Bank paid to Dexia a further 0.4 billion TRY.
The goodwill is primarily attributable to the potential synergies of the business as well as well established business processes. The goodwill will not be deducted for tax purposes in future periods.
Gross amount of loans and receivables acquired through this business combination amounted to 637.3 billion RUB. The amount of cash flows not expected to be received was assessed at 23.0 billion RUB.
The Group’s consolidated net profit for the year ended 31 December 2012 would be 354.2 billion RUB if the acquisition occurred on 1 January 2012.
Profit of DenizBank since the acquisition date amounted to 3.9 billion RUB.
For the purpose of determining goodwill from the business combination preliminary fair values of identifiable assets and liabilities of DenizBank based on the results of an independent external appraisal at the acquisition date were as follows:
| In billions of Russian Roubles | Preliminary fair value |
|---|---|
| Cash and cash equivalents | 47.2 |
| Mandatory cash balances with central banks | 64.7 |
| Trading securities | 7.4 |
| Loans to banks | 2.2 |
| Loans and advances to customers | 616.1 |
| Securities pledged under repurchase agreements | 22.7 |
| Investment securities available for sale | 95.7 |
| Investment securities held to maturity | 4.3 |
| Deferred income tax asset | 3.4 |
| Premises and equipment | 7.1 |
| Other assets | 50.0 |
| Total assets | 920.8 |
| Due to banks | (45.1) |
| Due to individuals | (342.1) |
| Due to corporate customers | (238.6) |
| Debt securities in issue | (27.7) |
| Other borrowed funds | (103.8) |
| Deferred income tax liability | (6.4) |
| Other liabilities | (28.4) |
| Subordinated debt | (14.1) |
| Total liabilities | (806.2) |
| Fair value of net assets of subsidiary | 114.6 |
|
Calculation of goodwill: | |
| Total purchase consideration | 118.7 |
| Non-controlling interest at fair value | 0.4 |
| Fair value of net assets of subsidiary | (114.6) |
| Goodwill on acquisition | 4.5 |
In August 2012 the Bank and BNP Paribas Personal Finance, the consumer lending division of the BNP Paribas Group and leading provider of consumer loans in France and Europe. closed the transaction on the creation of the Russian POS (Point of Sale) finance bank. The bank BNP Paribas Vostok LLC will operate under the Cetelem brand. The Bank has 70% share in BNP Paribas Vostok LLC with the remaining 30% stake being owned by BNP Paribas Personal Finance France, which owns the Cetelem brand. The bank will allow the Group to take up a leading position in the Russian POS market. Consideration paid by the Bank amounted to 5.2 billion RUB.
The goodwill is primarily attributable to the potential synergies of the business as well as well-established business processes. The goodwill will not be deducted for tax purposes in future periods.
Gross amount of loans and receivables acquired through this business combination amounted to 16.9 billion RUB. The amount of cash flows not expected to be received was assessed at 0.1 billion RUB.
Loss of BNP Paribas Vostok LLC since the acquisition date amounted to 0.2 billion RUB.
For the purpose of determining goodwill from the business combination fair values of identifiable assets and liabilities of BNP Paribas Vostok LLC based on the preliminary results of an independent external appraisal at the acquisition date were as follows:
| In billions of Russian Roubles | Fair value |
|---|---|
| Cash and cash equivalents | 1.3 |
| Mandatory cash balances with central banks | 0.2 |
| Due from banks | 0.3 |
| Loans and advances to customers | 16.8 |
| Premises and equipment | 0.2 |
| Other assets | 1.3 |
| Total assets | 20.1 |
| Due to banks | (11.7) |
| Due to customers | (0.8) |
| Other liabilities | (0.6) |
| Total liabilities | (13.1) |
| Fair value of net assets of subsidiary | 7.0 |
| Calculation of goodwill: | |
| Total purchase consideration | 5.2 |
| Non-controlling interest at fair value | 2.1 |
| Fair value of net assets of subsidiary | (7.0) |
| Goodwill on acquisition | 0.3 |
In February 2012 following the entering into sale and purchase agreement in September 2011 the Bank has completed its acquisition of 100% of Sberbank Europe AG (former Volksbank International AG (“VBI”)). Consideration paid by the Bank amounted to Euro 0.5 billion.
This transaction represents the Bank’s first major acquisition outside the CIS and is another step in its transformation from a dominant domestic financial institution to a leading international bank. Sberbank Europe AG has 295 branches and over 600.000 clients. VBI’s subsidiaries are within the top 10 financial institutions (by total assets) in each of Bosnia and Herzegovina, Croatia. Czech Republic, and Slovakia, and within the top 15 financial institutions (by total assets) in each of Hungary, Serbia and Slovenia. It also has presence in Ukraine and holds a limited banking license in Austria.
The goodwill is primarily attributable to the potential synergies and profitability of the business as well as set up business processes. The goodwill will not be deducted for tax purposes in future periods.
Gross amount of loans and receivables acquired through this business combination amounted to 301,2 billion RUB. The amount of cash flows not expected to be received was assessed at 18.2 billion RUB.
Loss of Sberbank Europe AG since the acquisition date amounted to 8.0 billion RUB.
The Group’s consolidated net profit would not change if the acquisition occurred on 1 January 2012.
For the purpose of determining goodwill from the business combination fair values of identifiable assets and liabilities of Sberbank Europe AG based on the final results of an independent external appraisal at the acquisition date were as follows:
| In billions of Russian Roubles | Fair value |
|---|---|
| Cash and cash equivalents | 42.8 |
| Mandatory cash balances with central banks | 10.5 |
| Trading securities | 0.4 |
| Loans to banks | 15.9 |
| Loans and advances to customers | 251.0 |
| Securities pledged under repurchase agreements | 4.9 |
| Investment securities available for sale | 14.9 |
| Investment securities held to maturity | 1.9 |
| Deferred income tax asset | 1.2 |
| Premises and equipment | 4.5 |
| Other assets | 13.9 |
| Total assets | 361.9 |
| Due to banks | (50.5) |
| Due to individuals | (109.4) |
| Due to corporate customers | (77.3) |
| Debt securities in issue | (9.4) |
| Other borrowed funds | (92.1) |
| Deferred income tax liability | (0.6) |
| Other liabilities | (4.4) |
| Subordinated debt | (3.4) |
| Total liabilities | (347.1) |
| Fair value of net assets of subsidiary | 14.8 |
|
Calculation of goodwill: | |
| Total purchase consideration | 20.0 |
| Non-controlling interest at fair value | 0.3 |
| Fair value of net assets of subsidiary | (14.8) |
| Goodwill on acquisition | 5.5 |
In June 2012 under the settlement of the loan to its borrower the Group repossessed a 100% share in CJSC Rublevo-Archangelskoe, a construction development company operating in Russia. The details of the fair value of net assets of CJSC Rublevo-Archangelskoe based on the results of the appraisal at the acquisition date were as follows:
| In billions of Russian Roubles | Fair value |
|---|---|
| Other non-financial assets | 37.5 |
| Total assets | 37.5 |
| Due to corporate customers | (0.2) |
| Deferred income tax liability | (0.3) |
| Total liabilities | (0.5) |
| Fair value of net assets of subsidiary | 37.0 |
| Calculation of goodwill: Total purchase consideration | 37.0 |
| Fair value of net assets of subsidiary | (37.0) |
| Goodwill on acquisition | — |
Net loss of CJSC Rublevo-Archangelskoe since the date of acquisition amounted to 0.2 billion RUB. The Group’s consolidated net profit would not change if the acquisition occurred on 1 January 2012.
During the year ended 31 December 2012 the Group acquired controlling interests in OJSC Krasnaya Polyana and several other companies. The preliminary fair value of net assets of these companies was as follows:
| In billions of Russian Roubles | Preliminary fair value |
|---|---|
| Cash and cash equivalents | 1.5 |
| Due from banks | 0.6 |
| Loans and advances to customers | 1.1 |
| Premises and equipment | 5.8 |
| Advances to developers | 7.5 |
| Other assets | 8.3 |
| Total assets | 24.8 |
| Borrowed funds | (5.8) |
| Advances received | (1.5) |
| Other liabilities | (1.2) |
| Total liabilities | (8.5) |
| Fair value of net assets of subsidiary | 16.3 |
|
Calculation of goodwill: | |
| Total purchase consideration | 14.6 |
| Non-controlling interest at fair value | 7.4 |
| Fair value of net assets of subsidiary | (16.3) |
| Goodwill on acquisition | 6.4 |
| Bargain purchase on acquisition | (0.7) |
Net loss of the acquired companies since the date of acquisition amounted 1.1 billion RUB. The Group’s consolidated net profit would not change if the acquisition occurred on 1 January 2012.
In 2012 the Group disposed of the 100.0% share in OJSC Holding company GVSU Centre for 5.4 billion RUB. The gain from this operation amounted to 0.1 billion RUB.
In April 2012 the Group disposed of a 60.00% share in CJSC GOTEK Group Management Company, a company involved in production and sale of packaging materials, for 0.06 billion RUB. The gain from this operation amounted to 0.5 billion RUB.
In December 2012 the Group disposed of a 100.00% share in CJSC NK Dulisma for 2.0 billion RUB and 27 million USD. The loss from this operation amounted to 3,6 billion RUB.
In December 2012 the Group disposed of a 38% share in Vester Retail N.V., a company specializing in retail trading, for the amount of 1.6 billion RUB. As at 31 December 2012 a remaining 16% share of Vester Retail N.V. were classified as investment securities available for sale.
The share of the subsidiaries of the Bank in the consolidated assets of the Group as at 31 December 2012 was 14.5% (31 December 2011: 7.1%).