VTB gets govt approval for Post Bank deal, promises 'not to offend' postal service when valuing stake

MOSCOW. July 15 (Interfax) - VTB has agreed with the government on a deal to buy a stake in Post Bank from Russian Post, and promises not to offend the national postal service when valuing the shares being acquired, VTB CEO Andrei Kostin said on the Rossiya 24 TV channel.

"We've basically reached a decision and got the government's approval for it. The appraiser will value it, on the one hand, fairly, but we will not offend Russian Post. We know that Russian Post is not only a socially important instrument. Its financial position is improving, but not so much as to punish them in any way. Therefore, I think that this will be beneficial for both VTB from the point of view of strategic development, and for Russian Post from the point of view of the further functioning of the bank, and from a financial point of view also," Kostin said.

Post Bank was established by VTB and Russian Post in 2016 as a retail bank with an extensive regional network based at post offices. The network has 25,000 branches serving 83 Russian regions, most of which are located at post offices, including in small and remote population centers. The bank has an active customer base of 8.6 million. VTB and Russian Post have equal stakes in the bank, whose CEO Alexander Pakhomov owns two shares.

VTB is discussing integrating Post Bank into its structure, but probably not before 2026, the Russian state bank's first deputy CEO, Dmitry Pyanov told Interfax at the beginning of July.

"Post Bank, for various reasons, does not have a complete line of products, for example, there are no mortgages and a very limited Russian Post stream customer base. We clearly understand that the right strategy for developing the retail business is not generating a duplicate team, duplicate product line, duplicate IT landscape where imports need to be replaced. Post Bank, for example, is not capable of financing a loyalty program like VTB finances, not capable of having such an IT budget for various products and advertising," Pyanov said.

"All these elements are critical for steady, profitable development of a growing retail business, so within VTB Bank we are seriously discussing the option of integrating Post Bank into the structure of VTB at some point, when we merge Otkritie, BM Bank and RNCB," he said.

"What it will look like technically and what timing is premature to say. There are particulars of a legal nature, Russian Post's interests must be factored in, including the infrastructure payment. It's large, several billion rubles," Pyanov added.

There are various possible scenarios for integration, such as along the lines of Otkritie, where clients migrate to VTB's books, or a consolidation option "like we're planning in regard to RNCB," he said.

"This will certainly be beyond the horizon of the second half of 2025. In my view, the earliest process window is the New Year holidays between 2025 and 2026," Pyanov said.