On May 10, 2016 VTB Bank has wrapped up integration of the Bank of Moscow and assumed all obligations to its customers who in the course of the bank's reorganization decided to become customers of VTB Bank, the latter said in a press release.
As part of integration VTB Bank set up a separate global line of business (Retail Business) which includes services provided to households and small businesses. While rolling out retail services VTB Bank focuses on the introduction of innovative, high-tech products and services. Measures aimed at expanding the lineup of products and firming its competitive advantages will continue taking into account VTB Bank's standards.
The bulk of the Bank of Moscow's business (roughly 70%, or over Rub 900 bln under international financial reporting standards) was folded into VTB Bank as part of the integration. More than 10 mln of households and small enterprises became VTB Bank's customers.
Retail and SME operations continue at former units of the Bank of Moscow, which were transformed into VTB Bank's retail divisions. After the merger numbers of bank accounts that were opened by the Bank of Moscow remained unchanged. All the products and services that were previously rendered to the customers are still offered. There is no need to resign valid agreements. For the convenience of customers the Bank of Moscow brand will at first remain valid and will be used together with the VTB Bank brand at outdoor signs of retail divisions and in advertising products.
"The switch to a single brand and platform will make VTB Group, as a whole, more competitive in the medium and long term," the press release emphasizes.
Dmitry Pianov, head of finance, senior vice president at VTB Bank, previously said that the full-year effect from the Bank of Moscow's reorganization by reducing the cost side would reach around Rub 10 bln. He also said that the Bank of Moscow would cut troubled assets that it received from its previous management from Rub 366 bln to Rub 243 bln, but as of today its opportunities to repay these debts have been exhausted nearly in full.
According to Pianov, VTB Group banks do not vie between one another for customers. VTB Bank's retail business is expected to earn Rub 10-11 bln in 2016 (vs. Rub 8 bln in 2015) and to grow 50% to 2x faster than the market.
As reorganization materials previously said, the charter capital of the Bank of Moscow's 'good' assets, which were folded into VTB Bank, total roughly Rub 20.96 bln, while the Bank of Moscow, which continues to operate as a legal entity and the primary objective of which is to wrap up the rehabilitation program, holds Rub 13.53 bln of the previous charter capital (Rub 34.5 bln). The media wrote that the 'toxic' bank would carry on business as M Bank.
