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Reports: Otkritie to merge units, awaits more funding from regulator

Otkritie Financial Corp. Bank, bailed out by the Russian central bank in August 2017, plans to merge its pension and insurance assets in 2018, and is also working on its merger with B&N Bank, Reuters reported Feb. 22, citing Otkritie Bank CEO Mikhail Zadornov.

The group's pension funds are expected to be merged by July or August, with the assets of the merged fund amounting to 600 billion Russian rubles as of Jan. 1, Zadornov said.

Otkritie's planned merger with B&N Bank, taken over by the central bank in September 2017, will also include National Bank Trust PJSC and PJSC Rosgosstrakh Bank, controlled by Otkritie. The merged bank is set to have 950 outlets in 70 Russian regions, the executive noted.

Otkritie Bank's insurance units PAO Rosgosstrakh and Capital-Strakhovanie are expected to be merged in August or September, and the integrated insurer is expected to post a profit for 2018, Zadornov was cited as saying.

B&N Bank and National Bank Trust, which have not yet been recapitalized as part of their financial recovery procedures, will receive capital injections from the central bank in the first quarter, the executive said, without disclosing the value of the planned capital boost.

More funding will be provided by the regulator's banking-sector consolidation fund to Otkritie Bank's pension funds and insurer Rosgosstrakh, but the sum will be lower than in 2017, when they received 42.9 billion rubles and 42.2 billion rubles, respectively, as part of a 456.2 billion ruble rescue package for Otkritie Bank.

Zadornov also said that either National Bank Trust or B&N Bank's unit JSC Rost Bank could be turned into a bad bank holding distressed assets from other lenders, but no asset transfers have been carried out as yet.

The supervisory board of Bank Otkritie recently approved its 2018 business plan under which the bank will strive to increase retail lending by 70% and expects to see a 30% growth in corporate and household deposits. The lender also expects to end 2018 with a small profit, the executive noted.

As of Feb. 22, US$1 was equivalent to 56.52 Russian rubles.