Sovcombank and Home Bank announce a strategic merger to operate on the Sovcombank platform
A strategic agreement has been reached between Sovcombank and Home Bank, formerly Housing Credit Bank, to merge their operations under the Sovcombank platform. The announcement comes from Sovcombank’s press service and outlines the plan as a two-stage transaction designed to unlock value for shareholders while extending the bank’s market reach.
Completion is targeted for the end of 2024, subject to all necessary regulatory clearances. The arrangement is framed as a value-creating move that leverages Home Bank’s expertise in point-of-sale lending across 79 regions where Sovcombank already operates.
Projected outcomes highlight significant growth in customer and portfolio metrics. The combined entity is expected to see active individual customers rise by about 50 percent, reaching roughly 9 million. Retail and deposit portfolios are anticipated to expand by 25 percent and 20 percent, respectively, with balances reaching about 915 billion rubles and 945 billion rubles.
The financial outline envisions a first phase in which Sovcombank will acquire 51 percent of Home Bank’s shares through issuing new Sovcombank shares representing 5 percent of the company’s authorized capital. In the second phase, planned by year-end 2024, Sovcombank aims to acquire the remaining 49 percent in Home Bank with cash payments spread over 2024–2025.
Management notes that the merged group would be able to maintain dividend distributions to Sovcombank shareholders while absorbing the buyout of the remaining shares. The expected positive effect of integrating Home Bank is framed as boosting capital and profitability for the combined bank, which supports the policy of sustaining dividend payouts through the transition period.
Home Bank’s valuation for the purposes of the transaction was cited as a substantial portion of its capital, excluding perpetual bonds and 2023 dividends. This structure enables Sovcombank to consolidate Home Bank’s results in its financial statements as early as 2024, once regulatory approvals are in place.
From leadership perspectives, the outlook centers on delivering strong returns and operational efficiency. A chairperson highlighted that the merger is aligned with the core objective of enhancing business efficiency while preserving high service standards for customers. The leadership emphasizes that the integration is expected to yield cost savings across customer acquisition, loan issuance, and deposit growth, contributing positively to the overall performance of the merged bank.
In the broader context for North American readers, the merger exemplifies a trend where financial groups combine regional expertise, scale, and cross-border financial acumen to expand footprint and improve service capabilities. The strategic fit includes leveraging Home Bank’s POS lending know-how and Sovcombank’s wide regional presence to deliver more comprehensive financial solutions across large markets.
Market observers will be watching regulatory developments closely, as the final timetable depends on the completion of approvals. If successful, the transaction would position the combined entity to operate with greater efficiency and scale, potentially influencing funding costs, lending activity, and consumer access to diverse financial products in both domestic and cross-border contexts.
Overall, the parties describe the merger as a disciplined growth initiative designed to preserve the quality of customer service while expanding the bank’s market reach, product capabilities, and financial strength. The strategic objective remains clear: grow the business while maintaining robust service levels and delivering value to shareholders over the medium term. (citation)