Russia's Gazprombank explores options for Swiss business, including sale

By Oliver Hirt

ZURICH (Reuters) -Russia's Gazprombank is exploring strategic options for its Swiss business, including a possible sale of all or parts of it, Zurich-based Gazprombank Switzerland said on Friday.

Gazprombank is one of the last remaining channels for financing trade flows between Russia and Switzerland because the other major Russian banks are subject to sanctions over Moscow's invasion of Ukraine.

Its Swiss business, which employs about 80 people, is mainly active in trade and export financing, including helping Swiss industrial groups finance exports to Eastern Europe. It also finances the extraction, transport and processing of raw materials from Russia to Western Europe for commodity traders.

"The Bank currently expects to conclude the strategic review process – including finding an investor if such option is pursued – by the end of the third quarter of 2022," it said.

Based on equity of about 200 million Swiss francs, the bank could be valued at around 150 million Swiss francs ($154 million), one industry source, who declined to be named, said.

Possible buyers for parts or all of Gazprombank could be financial investors or other banks, a Gazprombank Switzerland spokesperson said, declining to comment on a valuation.

Commodity traders could also be interested in Gazprombank Switzerland, the industry source told Reuters, and the first potential buyers have already expressed interest.

"It is the responsibility of the Board of Directors to regularly review the strategic orientation of a bank and to realign the business model if necessary," the spokesperson said when asked whether existing or potential international sanctions had triggered the strategic review.

Asked about any possible influence from the Swiss Financial Market Supervisory Authority FINMA, the bank spokesperson said: "The initiated strategy review is in the bank's own interest and not due to external pressure."

Gazprombank Switzerland was strongly capitalised and operationally well positioned, the spokesperson added.

According to the latest publicly available information, Gazprombank Switzerland made a profit of 3 million francs in the first half of 2021, down from 4 million in the year-ago period.

Gazprombank is not the only Swiss subsidiary of a major Russian bank that may soon change hands.

FINMA has eased the restrictions against Sberbank (Switzerland) AG. This would allow the bank to reduce its balance sheet in view of a possible sale or change of ownership, the watchdog said this month.

($1 = 0.9744 Swiss francs)

(Reporting by Oliver Hirt, Writing by Michael Shields, Editing by Paul Carrel and Alexander Smith)