03.07.2022
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Otkritie and the Crimean RNKB are attached to VTB. All of them are under sanctions

The merged bank will still be the second in the banking system – to overtake Sberbank, it needs to become twice as large.

VTB, which has fallen under the sanctions of the United States and other countries, according to Kommersant’s sources, plans to take over two more state-owned banks, which also fell under restrictions.

These are two banks:

  • FC “Opening” – a bank assembled from several other banks (Khanty-Mansiysk Bank, Nomos Bank and others), which fell under the reorganization of the Central Bank in 2017 and eventually passed under the control of the state. In 2022, it fell under the toughest sanctions of the USA, Great Britain and was disconnected from SWIFT;
  • RNKB – previously called the Russian National Commercial Bank, until 2014 it was a small credit institution with one office in Moscow and belonged to the Bank of Moscow (which was already part of the VTB group at that time). Then, after the Crimean events, the bank was the first to open on the territory of the peninsula and soon came under the control of the local government (including for some time it was even listed on the balance sheet of the Crimean water utility). Then the bank passed into federal ownership and now represents almost the entire banking system of Crimea. He has been under sanctions since the very beginning of these events.

Accordingly, all banks have quite a lot in common: since the beginning of the reorganization, FC Otkritie has been led by Mikhail Zadornov, who until 2018 was the head of VTB24, and before the Crimean events, RNCB actually belonged to the VTB group.

The merger of the two banks will allow VTB to increase its customer base and the number of offices. So, VTB had 16 million customers, Otkritie had another 3.1 million, and RNCB had 2.2 million. The total assets of all three banks will amount to 22.9 trillion rubles, and capital – 2.24 trillion. True, even with such figures it will be difficult to overtake the main competitor – Sberbank, because it has 38.3 trillion rubles of assets and 5.16 trillion is capital.

The merged bank will have about 2,000 offices (against 13,200 for Sberbank), moreover, some of them may be reduced. The fact is that functionally VTB and Otkritie are universal banks focused on approximately the same categories of customers and services. Accordingly, VTB may reduce the network of branches for the sake of savings – there will be no need to duplicate functionality in the united bank.

In the case of RNCB, the united VTB will get access to the Crimea – where it was previously afraid to go because of possible sanctions.

Note that the merger of Otkritie with VTB may be due to the inability to sell this bank. Thus, the state spent about 550 billion rubles on the additional capitalization of the bank, and due to sanctions and the difficult situation in the country, it will not be possible to sell it for an adequate price.

So far, information about the merger of banks is unofficial, but according to sources, the merger itself will take place in early May.

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