VTB deal to sell Rosgosstrakh stalls due to financing difficulties - Kostin

VLADIVOSTOK. Sept 5 (Interfax) - The deal to sell Rosgosstrakh has stalled due to financing difficulties, and the issue will be clarified in the coming month, VTB CEO Andrei Kostin told reporters on the sidelines of the Eastern Economic Forum.

"The amount [of the deal] was good. I don't know, the deal was on and now it's stalled. I don't know, but it seems like the buyer has some kind of financing problem," Kostin told the media.

He said he hoped the Central Bank's permission for the deal "will still be issued." "I think this will become clear in the next month," Kostin said.

"If not, then we'll leave it. Rosgosstrakh is not that important for us, because it does not affect capital. It's an investment in a core financial asset. But we have already started selling our insurance assets. We've sold VTB Insurance, we have no desire to be involved in this business anymore. So if we don't sell [Rosgosstrakh] it'll remain with us. Everything will be clear in the next month or two," he said.

"We are not naming [he potential buyer of Rosgosstrakh], because these things are always sensitive. In the near future, it will be clear whether this buyer will buy or not; generally speaking, all the basic terms [of the transaction) have been agreed upon," he told RBC TV on the sidelines of the EEF.

Rosgosstrakh "is making good money today [for VTB], it has a good return on equity," Kostin said. "It's just that the insurance business is a serious business, it needs to be taken seriously, and we've taken the path of selling, we've sold VTB Insurance, and we wouldn't want to be seriously involved in the insurance business today," Kostin said.

Regarding the sale of VTB Insurance many years ago, Kostin said: "We have a block of shares in SOGAZ that we received when we sold VTB Insurance. But we are also staying there for now, this is considered a core investment for us."

Much earlier, speaking about the deal to sell Rosgosstrakh, Kostin said that initially there had been several candidates to buy it, "but now it seems there is one." This candidate, he said, is "a player in the financial market, but not in the insurance market."

"We're into the final month of the Rosgosstrakh deal. September will determine whether Rosgosstrakh will remain part of the VTB Group or will be sold to a third party," VTB First Deputy CEO Dmitry Pyanov told journalists at the end of August.

"SOGAZ is not a potential candidate to buy RGS, and neither is Sudarikov's entity [Sergei Sudarikov was considered one of main beneficiaries of the Region Group]." "These are not the counterparties with whom we are negotiating the sale of Rosgosstrakh; they were not candidates for participation in the deal and did not participate in due diligence," Pyanov said.

Regarding the business development prospects of another major VTB Group insurer, Rosgosstrakh Life, Pyanov told Interfax on the sidelines of the St. Petersburg International Economic Forum in June that it would not be part of the deal to sell Rosgosstrakh and that the group would develop the company.

An insurance market expert said an asset like Rosgosstrakh might be worth 100 billion rubles or more. He told Interfax that the insurer SOGAZ and Region, a multidisciplinary group of companies operating in all segments of the financial market, were mentioned as potential buyers at the initial stage of negotiations on a possible sale. Later, the Baltic Leasing group of companies was included and remained on the list of candidates.

"The size of Rosgosstrakh's business and of the deal itself will most likely mean the buyer would have to raise a considerable loan for it, which may create technical difficulties for the transaction itself," the expert said.

Rosgosstrakh's net profit under IFRS was 5.4 billion rubles in H1 2025. The company's assets increased to 130.2 billion rubles from to 128 billion rubles as of December 31, 2024. Its capital increased to 71 billion rubles from 65.7 billion rubles. Revenue from insurance contracts grew 6.8% year-on-year to 48.9 billion rubles.

Rosgosstrakh became part of the VTB Group as part of the deal to purchase Otkritie's assets in December 2022. The bank's management has said the insurance business is not complementary to VTB, but the group is not prepared to sell the asset at any price. Otkritie Bank owned more than 99% of Rosgosstrakh's capital, while minority shareholders owned less than 1%.