PRESS: CEO sees merger of Otkritie with VTB closed after August

MOSCOW, Jun 15 (PRIME) -- A merger between Otkritie Financial Corporation (CB) Bank and Russia’s second largest bank VTB will not be closed earlier than in September–November, VTB Bank CEO Andrei Kostin said in an interview to Kommersant business daily published on Wednesday.

In April, Kommersant reported that Kostin sent a letter to Prime Minister Mikhail Mishustin suggesting consolidation of state-controlled Otkritie FC Bank and Russian National Commercial Bank (RNCB) into a group with VTB. The central bank supported the suggestion.

“The merger idea was supported by the central bank and the government, and the president issued the ruling. But it should be noted that it is a rather troublesome process. We are to coordinate many technical moments. For instance, the central bank is coordinating an appraiser now. We think that the appraisal would take two to three months. I don’t think that the deal will be closed before autumn,” Kostin told Kommersant.

Kostin was unaware about all the problems that Otkritie FC Bank had, but the regulator cleared the majority of them before February 24. Otkritie’s subsidiary Bank Trust is not a part of the deal, it will remain as a separate bank for bad debts and non-core assets, he said.

VTB will not open its own offices in Crimea, it plans to work in the republic through RNCB after a merger into a single banking group.

“RNCB was created some time ago on the basis of our subsidiary bank. We transferred our Crimean network and VTB personnel to the bank, and we gave its shares to the government as a gift. And we are simply returning to Crimea this way today,” he said.

RNCB will not be merged into VTB because it is a separate retail bank with its own geography, its clients don’t overlap with VTB, and there will be no optimization or cost cutting in case of a merger, he said, adding that the government was discussing allowing RNCB to work in the Donetsk and Luhansk people’s republics.

The Russian banking sector suffered serious losses in 2022, but VTB expects to have a net profit in 2023, Kostin said.

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