KIT Finance, Absolut Bank might merge in H2 2014
MOSCOW. Oct 1 (Interfax) - The merger of KIT Finance into Absolut Bank cannot be completed before the middle of 2014, when KIT Finance is expected to emerge from its financial recovery plan, Yury Novozhilov, the executive director of the Blagosostoyanie pension fund, which controls both banks, told reporters on Monday.
"We've never hidden that we are considering the possibility of merging KIT Finance into Absolut Bank. But this might be linked to KIT Finance's emergence from its financial recovery plan toward the middle of 2014," Novozhilov said.
He said KIT Finance will be liquidated immediately after emerging from the financial recovery plan. "This will mean that KIT Finance will emerge from financial recovery, that KIT Finance as a bank will be liquidated. But this takes another eight-nine months," Novozhilov said.
He said consultations on this issue are being held with the Central Bank and Deposit Insurance Agency. The schedule for the merger process must be cleared with the Central Bank, he said.
Following the completion of the merger, Absolut Bank's business model, taking into account its development strategy, will be presented to rating agencies in order to affirm the ratings the lender now has, Novozhilov said.
He also did not rule out that Blagosostoyanie might sell Absolut Bank in future. "We bought it at 0.6 of equity. We'll therefore sell at some point for more," Novozhilov said, adding that the pension fund does not currently have any specific plans to sell the bank.
"We're not planning anything. We bought a good bank, very clean, for a very good price because [Belgium's] KBC group was leaving the Russian market. I believe that this will be a more profitable asset that will be worth much more. What future plans there will be for working with this asset in two-three years, we'll see," Novozhilov said.