UAE Investors Plan to Purchase More Equity in Belarus' Largest Bank

Soven 1 Holding (UAE), the majority shareholder of Belarus’s Priorbank, plans to buy out the Belarus State Property Committee equity of 6.31% of the bank’s shares. The decision is of interest as it implies there is significant unrealized value in shares of businesses operating in sanctioned countries and that there are investors prepared to take on Western political risk.

Soven 1 Holding had purchased 87.74% of Priorbank and its subsidiaries from Austrian-based Raiffeisen Bank International AG (RBI) in September last year. This came after RBI came under significant US and EU political pressure to divest its Russian and Belorussian businesses. RBI had operated in Belarus since 1989 and in Russia since 1996. Priorbank has billions of dollars of assets and remains profitable.

The European Central Bank ECB) had ordered RBI to accelerate its exit and reduce its balance sheet in Russia by 65% by 2026. Most of RBI shareholders are Austrian and Eastern European institutions, as well as publicly traded shares. They have had to take haircuts on the true valuation of Priorbank in order to satisfy the ECB.

The decision to sell the Belarus state-owned shares was made at Priorbank’s shareholder meeting on May 28. The bank has not disclosed further details.

The Belarus economy is growing at a rate of 2.8% per annum and has a debt-to-GDP ratio of 24%. Per capita income (PPP) is about US$32,000. The Belorussian economy is currently outperforming its eastern European neighbours. The average EU GDP growth rate expected this year is 0.7%. In 2024, Belarus’s key trading partners included Russia, China, the UAE, Poland, Germany, Kazakhstan, Turkiye, Italy, Brazil, Uzbekistan, India, Azerbaijan, and Lithuania.