MegaFon seeks partner for banking JV, but might postpone project
MOSCOW. Jan 29 (Interfax) - MegaFon , one of Russia's top three mobile operators, has begun studying the banking sector with a view to finding a suitable partner to form a joint venture, but it does not intend to be hasty in implementing the banking project given the situation in the retail lending sector.
"We would indeed like to form a joint venture, but we're not rushing with this. Despite the growth of bank lending to individuals, as you know, it is heading for some difficult times. Throughout the world, the state is starting to regulate this process more vigorously," MegaFon CEO Ivan Tavrin said in an interview with Interfax.
"We are at the very initial stage of this process and cannot guarantee that the project will be implemented this year," Tavrin said, adding that the company has not yet begun actual negotiations.
The company has also not yet drawn up a shortlist of banks with which to form a joint venture, he said. One of the criteria for selecting a partner will be experience in retail banking, Tavrin said earlier.
He said MegaFon would prefer that its future partner have control over the banking joint venture, both in terms of management and equity.
"We are prepared to invest our brand, knowledge of our clients into the joint venture. From our partner, we in turn expect financial participation, ability to manage and, of course, experience in banking. We understand that it is this partner who will control this joint venture - both management and in terms of the stake. We want this to be a shareholder who owns a majority stake in the company," Tavrin said.
The objective of the future venture will be to develop banking products in the area of mobile financial services. This particularly refers to a payments system and retail lending, Tavrin said.
"There are several such areas. First of all, this is everything related to payments. We will certainly be a good channel for conducting payments. Secondly, it's lending. We as an operator can assess the solvency of a client, draw conclusions about how good a borrower they are," Tavrin said.
MegaFon is currently the only Big Three mobile operator without a permanent banking partner. Mobile TeleSystems (MTS) bought a blocking stake in MTS Bank (formerly Moscow Bank for Reconstruction and Development ) last year from its parent company Sistema JSFC . Vimpelcom , meanwhile, works with Alfa Bank , with which the operator has a common beneficiary - Mikhail Fridman's Alfa Group.
MegaFon also has a suitable banking partner in terms of affiliation with principal shareholders: Round Bank (formerly Ferrobank). This bank's principal owners were previously Vladimir Skoch and Alisher Usmanov, who controls MegaFon, but last summer the bank was acquired by Usmanov's partner Leon Semenenko.
Interfax sources in the banking sector said that MegaFon could start providing mobile financial services on the basis of Round Bank.
Round Bank does not, however, quite fit the key criteria mentioned by Tavrin earlier - experience working with retail customers and an extensive retail network. Round Bank traditionally serviced the financial flows of Usmanov's companies.
However, former OTP Bank manager Bulad Subanov became head of Round in October 2013 and told Interfax that a new strategy for the bank would be adopted by the end of the year. "There are certainly plans to develop retail, but the model has not been selected yet," Subanov said.