Alfa Bank Attractive Valuation

Alfa Bank, a major Russian commercial bank is worth 343,4 billion rubles, around $5billion US Dollars, the bank said in a report filed with the government as part of a mandatory valuation of its shares in December 2018 Vedomosti has reported reports.

The report concludes Alfa Bank is rated at 0.8 capital. This suggests that among publicly traded banks only Sberbank and Tinkoff Bank are more expensive.

According to the bank, the market value of one of its ordinary shares as of December 13 was 5,764.15 rubles ($86).

Rumors have been circulating that the Russian bank’s oligarch owner Mikhail Fridman is in talks to sell the business. The Financial Times reported last month Fridman has been in talks with the Kremlin and Alfa-Bank had approached some western banks to suggest a sale. The bank has since denied reports of a sale.

In an official statement, Alfa Bank said the valuation assessment was a routine valuation and that there was nothing else behind it. The bank’s quarterly reports contain no information on attracting possible appraisers.

On the 11 Dec, 2018 Alfa Bank issued the following press release denying rumors of negotiations for the sale of the groups Russian banking assets. The press release can be found here.

“In light of recent media reports alleging some negotiations on the sale of Alfa Group’s banking assets in the Russian Federation, we declare that this information bears no relation to reality. We categorically deny these rumors and the fact of any negotiations. No discussions of the kind have been or are being conducted with the market players.

Alfa Banking Group, comprising ABH Financial, AO “Alfa-Bank” and subsidiaries, over its history has shown positive dynamics in the key financial ratios and main business areas: the Bank is increasing its loan portfolio, the volume of borrowed funds, the interest and fee revenue, as well as the number of customers. Consistently implementing the development strategy, the Bank is boosting its share in the key market segments, along with improving operating efficiency and asset quality. The business volume increase is accompanied by a remarkable increment in profit, which testifies to an efficient business model chosen by the Bank.

We view the emerging rumors as an attempt to discredit the Bank’s shareholders and management. We have not planned and are not planning to sell Alfa-Bank.”

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