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Eastern Europe
January 26, 2018 www.intellinews.com I Page 16
Russia’s VTB has lost control of the post bank project
bne IntelliNews
Russia’s state-owned banking behemoth VTB has lost control of the project to set up a new bank on the basis of the nation’s post office branch network.
The long mooted project moved quickly forward last year with VTB being given the lead to set
the new bank up, in a joint venture that used the post office’s extensive branch network. VTB was very aggressive in the negotiation on setting up the post bank and was in effect going to take full control of its operations, according to bne Intel- liNews sources. The appeal is the access to tril- lions of rubles of cash payments that flow through the state’s social payment obligations.
Russia is overbanked but one of the problems it faces is the country is so huge, and most regions are so sparsely populated, that it doesn't make economic sense of have banks in all the towns and villages. The post bank dodges this problem, as given the post office is responsible for man- datory payments to the population, in particular paying out pensions, there has to be a post office in every settlement, which can cheaply double up as a bank.
However, nominal head of the new bank Dmitry Rudenko bought two shares in the new bank from VTB, which previously owned 50% plus 1 share
on December 28. Now VTB and the post office’s parent company Pochta Rossii own the bank on a parity basis with 50% minus 1 share.
VTB had been given the lead to set the new bank up, in a joint venture that used the post office’s extensive branch network.
The changes in the shareholder structure for the post bank come out of the blue and the authori- ties have given no explanation for them. Rudenko says that he will represent the interests of Pochta Rossii on the board, which represents a swing
of the pendulum back towards the post office. Rudenko will be an independent player, Vedomo- sti reports, citing players close to the talks, and with his two shares becomes the kingmaker in the decision making process.
VTB has been subject to increased scrutiny by the Central Bank of Russia (CBR), which clearly is not happy with the way the bank is run. CEO Andrey Kostin admitted this week that the CBR has been inspecting the bank for the last 10 months and has demanded it increase its loan-loss provi- sions by RUB25bn, doubling the amount the bank was going to put aside to deal with potential bad loans to RUB50bn ($900mn), or about a third of all the profits the bank expects to make in 2017. At the same time it is reported that the Russian rat- ing agency ARCA has refused to give VTB a triple A rating, which would automatically cut it off from holding state funds, although the ARCA report on the bank has not been released.
VTB was already rolling out the boat on the back of the new bank and intending to go to toe-to-toe with sister bank, retail banking giant Sberbank, that has branches across the whole country. This time last year VTB announced plans to hire 7,000