The supervisory board at VTB North-West decided to launch a project of folding the lender into Bank VTB, VTB Group’s press service reported.
This decision is confirmation of the group’s development strategy in Russia, which was announced in 2006. At the first stage of integration in 2007—2009 retail assets were brought under the roof of VTB 24, corporate activities outside of the North-West Federal District were folded into Bank VTB, the network was divided in retail and corporate areas, the number of sales offices was streamlined in the regions of joint coverage, the product range, primary systems and business processes were unified to the highest degree possible.
The second phase of the takeover procedure, which includes the legal merger of banks, was calculated for around 12 months and will be wrapped up by the end of Q1 2011. Bank VTB’s North-regional center, the parent bank’s division with the expanded authority, will be rolled out based on VTB North-West. The regional center will gain on operating management terms all corporate branches of VTB Group in the North-West Federal District, including both VTB North-West’s network and the one run by Bank VTB, which consists of branches in Saint Petersburg, Kaliningrad, Syktyvkar and Vologda.
VTB North-West is a leading corporate lender in the region. As of January 1, 2010 the bank’s share on the corporate lending market in the North-West Federal District and the Kirov region was above 14.5% and 14.8% in the segment of corporate deposits. As of January 1, 2010 the lender’s IFRS assets were equal to nearly Rub 250 bln or 6.8% of VTB Group’s assets.
Bank VTB board member Ekaterina Petelina noted that “VTB North-West’s takeover will allow the lender to achieve a powerful synergetic effect by making corporate client operations more efficient and enhancing business manageability, containing costs through elimination of overlapping functions and making joint use of infrastructure. Based on preliminary calculations, annual economic benefits from the integration will total at least Rub 700 mln. Launching the takeover project we keep the promise given to our shareholders during the IPO. In addition, in the course of integration the closest attention will be devoted to maintaining the clientele and offering high quality services”.
“A takeover decision in principle was adopted four years ago. During this time the degree of our integration and the scope of cooperation with the group’s head bank have reached such a high level that in reality we’re already operating as Bank VTB’s regional center in the North-West Federal District. The scope of the regional center’s authority will be sufficient to preserve the current client service schedule, including the traditionally high speed of decision-making," VTB North-West management board chairman Dmitry Olyunin noted in turn.
