First M&A Deal Since Invasion: How TAS Group Bought Idea Bank

Polish Getin Holding and Ukrainian TAS Group have signed a deal to purchase Idea Bank Ukraine. The purchase will cost the new owner $34 million and will become the first mergers and acquisitions (M&A) deal in the banking sector after Russia launched its full-scale invasion of Ukraine in February 2022. 

Ukraine’s central bank, the National Bank of Ukraine (NBU), forced Idea Bank’s previous owner, Getin Holding, to sell the bank before the end of October because owner Leszek Czarnecki became a subject of criminal investigation in Poland. 

The NBU recognized the impeccable business reputation of both the Polish holding itself and its owner Charnecki on March 27, 2023, Interfax-Ukraine reported. Getin Holding advisors included Ukraine’s investment company FinPoint, and Ukraine’s law firm Sayenko Kharenko. 

The buyer of 100% of the shares is the Alkemi Limited (Cyprus), which is part of the TAS Group, belonging to Serhiy Tigipko. 

The deal is signed, but this is not the end of the story. It also needs to be approved by the NBU and the Antimonopoly Committee of Ukraine. The Agreement is governed by English law and the requirements of the Warsaw Stock Exchange, TAS Group’s press release said. 

“If regulatory approval is obtained, the transaction may be closed in the first quarter of 2025,” the press office of TAS Group told Kyiv Post. 

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However, Idea Bank had been a lucrative object years before this year’s deal was struck. 

Strong business model

Idea Bank was one of the first commercial banks in Ukraine and received its banking license in 1996, according to records from the NBU. In the 2000s, Polish Getin Holding purchased it, making it part of the group. 

For nine months in 2024, Idea Bank ranked 26th in assets (Hr.11.7 billion, $282 million) according to NBU statistics. 

Idea Bank’s net profits rank 19th in the list, comprising just Hr. 473,000 ($11,400). The bank is known for its consumer loans (small loans individuals can borrow before they get their next wage) and is not alone in this niche. Other players earn much more, for example, A-bank and Monobank. A-bank earned more than Hr. 1 billion ($24.1 million) in net profits for the same nine months this year, while Universal Bank that manages Ukraine’s popular digital bank for Gen Z Monobank earned almost Hr.4 billion ($96.5 million). 

Despite Idea Bank’s modest results, Ukrainian investors were hunting for the bank even before the COVID-19 pandemic. A company from Dragon Capital Group, belonging to Czech entrepreneur Tomas Fiala, almost bought the bank in 2019 for $58 million, but canceled the deal due when the pandemic took hold. 

PUMB bank, a part of SKM Holding owned by Ukraine’s richest man Rinat Akhmetov, signed a deal to buy the bank at the end of 2021 for about $50 billion, but the deal was not finalized because of Russia's invasion of Ukraine, Forbes Ukraine reported. 

What makes Idea Bank so special? 

A banking sector source close to the 2024 deal who asked to remain anonymous told Kyiv Post that the bank works with riskier clients and does so confidently, though specific details cannot be disclosed due to their sensitivity. 

“Just to scratch the surface, the bank is successful in its niche and successfully competes in the riskier segment of retail lending,” the source said. 

The bank’s share of loans amounts to about 70% of its portfolio – the highest level compared to other operators in Ukraine’s banking sector, with the average being 25%. The closest competitor is Bank Lviv, with its portfolio comprising 64% of loans.

“This is the most bankable bank of Ukraine,” financial analyst Yevhen Dubogryz wrote in his post on Facebook, explaining the phenomenon. 

Non-performing loans reach 44% – it used to be 60% in 2022.

This, “seems a lot” according to Dubogryz. But the key indicator of profitability, the cost-to-income ratio, reaches 34% - one of the best results in the sector.

“The bank can generate about $10-12 million in net cash per year and it can pay it off in 3-3.5 years,” the financial analyst added. 

So, let’s look at the buyer.

Who are TAS Group and who is Serhiy Tigipko?

The Idea Bank deal was a fire sale. Poland began an investigation against Getin Holding’s owner Leszek Czarnecki, Poland’s richest man, in 2008. He became an object of charges from law enforcement for alleged fraud relating to 130m zloty (£32.2 million) of customers' money in Idea Bank Poland, Polish media reported. 

Czarnecki lost both Idea Bank and Poland’s tenth biggest bank Getin Noble Bank (GNB), as they were both placed to the state bank guarantee fund due to lack of capital. 

Czarnecki left Poland, presumably, in the boot of his car, and is now hiding abroad, Polish media wrote. This potentially explains why the NBU recognized the business reputation of both the Polish holding itself and its main owner Czarnecki as flawed, Interfax reported. 

In May, the regulator set a deadline to sell fast until the end of October 2024. This makes the transaction complicated. 

Three finalists proposed higher prices than the other five, the source said. The sum of $34 million turned out to be a decent price for Ukraine during wartime. 

“The sale price of the bank is equal to approximately 1x capital as of the end of 2023 and approximately 0.75-0.8 of the bank's capital as of the planned closing date of the transaction. Our competitors that are traded on the stock exchange, are valued typically from 0.3 capital (Raiffeisenbank International) to 1+ capital (OTP),” FinPoint founder Serhii Budkin wrote.

Initially, Ukrainian TAS Group came to be the winner. TAS Group is owned by Ukrainian Serhiy Tigipko, a successful entrepreneur and politician. 

Its owner, Serhii Tigipko, is the founder of Ukraine’s largest bank Privatbank, but he later sold it to Dnipro-based oligarch Ihor Kolomoisky. He founded TAS Group that includes businesses in the financial sector: B2B bank TASkombank, retail Gen Z digital bank Monobank, leading car insurance company TAS. 

TAS Group manages a factory that produces cargo wagons, Dniprovagonmash. It also became a sandbox for digital banks, from which neobanks Sportbank and Izibank were founded. Izibank is still operating, but Tigipko stopped cooperating with Sportbank and it was closed in 2024. 

Tigipko dabbled in politics as a lawmaker during the time of Ukraine’s ex-president Viktor Yanukovich, who fled the country following the Maidan Revolution in 2014, In 2024, Tihipko is now focused on business and his strategy is “invest in Ukraine and sell abroad.” 

The company’s portfolio includes an agricultural holding with 80,000 hectares of land and 11 factories in various industries. These include manufacturing wagons for European railways together with Austrian heavy industry giant Voestalpine. 

Idea Bank is a potential tool to earn on retail lending. The Polish investigation may have even helped to finish such a long-awaited deal for Ukraine’s market. 

Idea Bank Ukraine was profitable without any help from the parent company, which is the bank’s strength. 

“Ukrainian Idea Bank was not affected by the problems surrounding its shareholder,” ICU financial analyst Mykhailo Demkiv told Kyiv Post. 

“The bank has a transparent business model and is profitable,” he added.