Meetings held by the boards of directors at Bank Rossiya (Saint Petersburg) and Gazenergoprombank (Moscow) gave the green light to a merger, the lending institutions said in a joint press release. A final decision will be taken at the lenders’ shareholders meetings that will take place in April. “The merger will result in the appearance on the market of a more competitive universal bank with a wide regional network dealing with both corporate clients and retail products," the press release noted.

At the end of February 2010 the Federal Anti-Trust Service (FAS) upheld a merger request of the banks. PriceWaterHouseCoopers performed due diligence on Bank Rossiya assets to determine the fair share price. Deloitte did the same for Gazenergoprombank. The merger is anticipated to be carried out through conversion of Gazenergoprombank stocks into those of Bank Rossiya. At the BoD meetings the stock conversion ratio, made up on the basis of independent auditor appraisal numbers, was discussed and approved.

“The merger will constitute a universal lender with a diversified regional network, enabling it to enhance efficiency of customer operations and successfully compete with big players on the market. One of the objectives to be pursued by the new lender is to become a Top 15 bank in Russia. Capitalization of the new lender will provide creditors and deposit holders of both banks with more reliable guarantees.

Bank Rossiya management board chairman Dmitry Lebedev commented on the board’s decision as follows: “We already said earlier that our bank’s development strategy implies a wide regional presence. Gazenergoprombank runs a diversified network of branches and has been awarded the sterling reputation of a retail products provider”. The official representative of Mezhregiongaz, Gazenergoprombank’s major shareholder, Maria Frolova noted that Gazenergoprombank has traditionally strong positions in the O&G and utility sectors. However, currently the bank targets expanding business by diversifying the mix of banking products and operations in other industries. The merger with such a strong corporate market player as Bank Rossiya will make possible to set up a universal bank with high capitalization”.

According to the data from news agency Banki.ru and Interfax-CEA, as of January 1, 2010 net assets held by Bank Rossiya were equal to Rub 111.7 bln (35th place in Russia). On the same date Gazenergoprombank’s net assets reached Rub 121.2 bln (32nd place in Russia). Both lending institutions are members of the national deposit insurance system.