AvtoVAZ attached loans – Newspaper Kommersant No. 222 (7423) dated 11/30/2022

AvtoVAZ will become the new owner of RN-Bank. A credit institution for a transaction can be valued at 0.6–0.7 of capital (at the middle of the year it was approximately 12.2 billion rubles). Given rising prices for cars, even domestic ones, and declining household incomes, having a bank of its own could help AvtoVAZ stimulate sales. But the success of integration will depend on access to cheap financing within the group or state programs to support car loans.

AvtoVAZ will be able to buy a 100% stake in RN-Bank. Such order signed by President Vladimir Putin on November 29. A representative of AvtoVAZ only said that “the company, together with shareholders and the relevant ministry, is discussing possible details of such a deal.” At the same time, “the final decision will be made later.” RN-Bank and Unicredit Bank did not answer Kommersant’s questions.

The deal to buy RN-Bank by AvtoVAZ is part of the Renault-Nissan group’s withdrawal from the Russian market (see “Kommersant” dated October 12), says Dmitry Kurbatsky, partner of FG “Dmitry Donskoy”. He draws attention to the fact that “the deal was delayed for a long time.” The expert admits that for RN-Bank “there was a competitive struggle, as it has high competencies and a good portfolio.” Mr. Kurbatsky believes that the bank was valued at 0.6-0.7 capital.

According to the presentation for investors, based on the return on equity at the middle of the year at 12.3%, the capital can be estimated at 12.2 billion rubles.

This will be the second sale of the captive autobank. At the end of October, all subsidiaries of the German Mercedes, including Mercedes-Benz Bank Rus, left the Russian market. Their assets were transferred to the Avtodom company (see “Kommersant” dated October 25). As for other banks of foreign automakers, of course, they will be sold, they are just waiting for buyers to offer an acceptable price – more than 0.5 capital, Dmitry Kurbatsky believes. In March, most captive banks stopped lending (see “Kommersant” dated March 21). However, to date, according to their websites, in addition to RN-Bank, car loans are issued by Toyota Bank and MS Bank Rus.

“Traditionally, a captive bank is a tool to stimulate sales of an auto brand. Taking into account the rise in prices and the dynamics of household incomes, lending remains critical for the majority of the population when buying even such a relatively inexpensive car as the Lada,” notes Frank RG project manager Stanislav Sukhov. Buying a bank with streamlined business processes can help AvtoVAZ strengthen its position in the new car market, agrees Egor Lopatin, deputy director of the financial institutions rating group of the NKR agency.

In the current environment, the company has good development prospects, and its own bank can help the company increase sales by offering competitive conditions for the consumer.

But an important success factor is also the ability to finance car loan programs, says Tatyana Kofanova, head of the DRT car companies group. Captive banks, she explains, were actively attracting cheap intra-group money, and now incentive programs from the state will be important.

Polina Trifonova, Ksenia Dementieva