Russia’s government approved the establishment of a massive new bank based on the country’s postal service, a move that will eventually create an institution with more retail branches than all other Russian banks combined. The new entity, called Post Bank, is a joint venture between Russian Post and one of the country’s largest lenders, state-owned VTB Bank.
Post Bank is being established in part to provide banking services across Russia’s far-flung, near-empty regions, and to target pensioners. VTB will fuse one of its subsidiaries, Leto Bank, into the new institution. The partners say the new institution will begin giving out loans as early as January 2016, with a pilot project to be launched in Moscow this fall.
Over the next three years, the bank will open outlets in no less than 15,000 Russian Post offices. After this initial rollout, the bank should start operating in all the 42,000 offices of the national operator. The current leader, Sberbank, has more than 17,000 outlets. Once it is completed, Post Bank will have more retail locations than all other Russian banks combined, according to the Russian banking portal Banki.ru.
Post Bank’s Board of Directors will be headed by Russian Communications Minister Nikolai Nikiforov. “The question of the creation of Post Bank has been discussed for 15 years; eventually we came to the conclusion that it would be created in partnership with the VTB Group,” Mr. Nikiforov told reporters at a conference in September.
According to the minister, after the renaming of Leto Bank as Post Bank, VTB will keep 50% plus 1 share of the new entity while the rest will be acquired by Russian Post. VTB will invest 16 billion rubles ($246 million) in Post Bank. In turn, Russian Post will assume the costs for modernizing its post offices to accommodate the banking operations.
The government won’t back Post Bank up with financial help, social benefits or donations, Leto Bank’s press office said, adding the new institution aims to bring more Russians into the banking system.…Interestingly, the Post Bank won't be competing much with private banks, since the clientele is different. The Post Bank will serve mostly the "unbankable" and those not profitable for private banks to serve. This will make the banking sector more profitable and also provide low-cost banking services for all Russians. No pay-day lenders.
Russia Beyond the Headlines
Moscow creates vast new bank from Post Office
Kira Egorova
Kira Egorova
No comments:
Post a Comment