Russian bank VTB doesn’t see merger with rival happening before autumn -newspaper By Reuters

(Reuters) – VTB, Russia’s second-largest lender, does not think a proposed merger with fellow state-run bank Otkritie will take place before autumn, Kommersant newspaper said on Tuesday.

Both banks have been targeted by U.S. sanctions.

The Russian central bank said on April 29 it backed the move. It made the announcement after Kommersant said authorities were considering the consolidation of VTB with Otkritie and RNCB, which is also state-run.

Andrei Kostin, VTB’s president and board chairman, told Kommersant that the process to merge VTB with Otkritie was rather time-consuming.

The central bank said in June that talks about the parameters of a possible merger were under way. Kostin said the entire process would take from two to three months.

“I don’t think the deal will be closed before autumn (this year),” he said, according to the newspaper.

Asked whether VTB would swallow up Otkritie or restructure it, taking only the profitable parts, he replied: “This option is also being considered,” Kommersant reported.

Savings from consolidating the two banks’ networks alone would exceed 30% thanks to cost reductions, he said.

RNCB – which operates primarily in Crimea, a part of Ukraine that Russia annexed in 2014 – would maintain its own identity as part of the proposed consolidation, he added, according to Kommersant.

The central bank said on April 29 it had been preparing to sell Otkritie, which it bailed out in 2017, on the market by listing its shares or to potential investors.