UniCredit Bank not for sale - CEO
UFA. June 4 (Interfax) - UniCredit Bank is not for sale, bank CEO Mikhail Alekseev said in response to media reports that Sistema plans to acquire a number of banks, including UniCredit Bank.
"This is from the realm of the unreal," Alekseev told journalists in Ufa on Wednesday.
"Yes, we know that we are periodically included on the list of potential, desired partners. We take that as a compliment," he said.
Alekseev also said the bank had no plans to substantially expand the branch network in 2014. "We are not planning a significant expansion of our network. Yes, we are opening some new locations where we believe it will be profitable and worthwhile. But I won't shy way from saying we will have to close other branches, where we see that the business outlook is not so great," he said.
At present, there are sufficient bank branches in the Russian regions, he said. "Every city, every township has banks, which are competing intensely with each other," he said.
"There is no reason for a headlong development of the network. All the more so that in Russia there are fairly inflexible equipment and security requirements. Opening any location is not an inexpensive undertaking. It takes considerable time to recoup those costs, several years as a rule. It only makes sense to do it where there is absolute certainty it will generate yields," he said.
Moreover, in recent years, with the development of e-commerce, including sales of banking products, as well as the proliferation of ATMs and expansion of remote banking services, numerous methods have emerged for "issuing loans, attracting deposits and interacting with clients," he said.
The current liquidity situation in the banking sector will lead to slightly higher interest rates on deposits, particular among those banks "vying most intensively to attract deposits from the public and corporate entities," he said.
"We expect that a certain upward adjustment might occur. As for loans, banks owned wholly or in part by the state have enough resources. To some extent demand exceeds supply. Therefore, most likely the situation [with lending] - give or take - will be more or less stable. Perhaps the overall cost of financing will be slightly higher across the entire system. In order the maintain margins, banks will raise [rates] slightly in certain segments. But [the increase] won't be very substantial," Alekseev said.
UniCredit Bank is the Russian subsidiary of the Unicredit Group. UniCredit Bank Austria AG (Austria) holds 100% of shares. The bank has 104 locations in Russia and one representative office in Belarus.
The bank was the 9th biggest in Russia by assets and the 5th biggest by retail deposits as of the end of the first quarter of 2014 according to the Interfax-100 ranking compiled by the Center for Economic Analysis.