BANK SAINT PETERSBURG: SPO: Placement Price Attractive, But Dilutive
Bank Saint Petersburg has commenced its SPO, placing 60mn common shares (13.6% of current capital) at RUB53 per share. This assumes a 6.4% discount to the stock price before the price announcement. The book building was completed yesterday, and the bank will raise RUB3.2bn. The main purpose of the placement is to meet the Depository Insurance Agency (DIA) requirements to increase Tier 1 Capital in exchange for its support. We consider the placement price attractive, taking into account the bank’s valuation of 2017E P/BV of 0.4x and P/E of 4.5x. At the same time, it is below the bank’s book value (RUB135), and thus is dilutive for our target price valuation. We incorporate the new share issue into our valuation model, and reduce our target price to RUB74.0 per share, from RUB80.5 per share, reiterating a BUY rating.
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