Major Russian bank (VTB) buying another

RUSSIA / FSU POLITICS - In Brief 02 Sep 2021 by Alex Teddy
On September 2 it was reported that VTB (Russia's second largest bank) is due to buy Pochta Bank by the end of 2021. VTB was the majority shareholder in Pochta Bank until 2017. It gave up control as a result of sanctions. Thereafter VTB and Pochta Rossiya (the postal service) had 50% (minus) of the shares. Rudenko, the Chairman of Pochta Bank had the other two shares.VTB will take back the shares from Mr Rudenko. VTB will therefore be the majority shareholder. As more Pochta Bank assets will be on VTB's balance sheets this will look good for VTB.The move comes because VTB is less and less worried about US sanctions. VTB has been under sanctions since 2014. This restricts the sort of deals that Western companies and banks can do with VTB and its subsidiaries if they are mainly controlled by VTB. The Biden Administration has shown no inclination to implement serious sanctions. Moreover, Russia is becoming smarter at circumventing them.Pochta Bank is Russia's 25th biggest lender. It mainly offers personal loans. This will make up 10% of VTB's retail loans. The banking sector in Russia has been becoming in 2020 and 2021 despite the pandemic. VTB said that it appears it will register its biggest ever profit in 2021: USD 4 billion.

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