Standard Bank, parent company of Stanbic Bank Ghana, is entering into a strategic partnership with Troika Dialog Group Limited (“Troika Dialog”), the most established and largest independent investment bank in Russia, in terms of which Standard Bank intends, subject to regulatory approvals, becoming a 33% shareholder in Troika Dialog.
The deal will initially comprise a US$200 million convertible loan extended by Standard Bank's International Operations to the Troika Dialog Group. Subject to the required regulatory approval process, this loan, together with the acquisition by Troika Dialog of Standard Bank's existing operation in Russia, ZAO Standard Bank, is convertible into a 33% equity stake in the merged entity. The combined operation will have a capital base in excess of US$850 million and will be strongly positioned to compete in the Russian financial services sector and to pursue banking consolidation opportunities in Russia.
The transaction is subject to the approval of the Central Bank of the Russian Federation and the Russian antitrust authorities and the South African Registrar of Banks.
Troika Dialog is a brokerage and investment bank that operates across the Commonwealth of Independent States (“CIS”). It has consistently demonstrated market strength in its core lines of business, namely capital markets (stock broking), investment banking, asset management, private equity investments and personal investments and finance. It is primarily focused on Russia and other CIS markets.
Russia is the third largest economy amongst global emerging markets and has considerable resource wealth. This presents a strong fit with Standard Bank, a leading emerging market banking group with a strong resource banking franchise. The investment is aligned with Standard Bank's strategy to expand its international networks and capabilities and, where appropriate, to find the right partners to support the expansion of these networks. This transaction enables Standard Bank to have an enhanced access to this large emerging economy, along with a close alliance with a leading Russian company.
In order to give effect to the strategic partnership, Standard Bank and Troika Dialog plan to enter a relationship agreement which will govern the ongoing shareholder relationship and commercial cooperation between the two groups. Standard Bank would also have the right to nominate two non-executive members onto the Troika Dialog board of directors which will total six.
A Standard Bank / Troika Dialog Joint Strategic Committee will be established and will meet regularly. This committee will have equal representation from both parties. The strategic cooperation between Standard Bank and Troika Dialog is expected to cover broad areas of cooperation in Russia and other international locations.