Central Bank of Russia selling Otkritie to VTB for 340 bln rubles, deal to close by end-2022

MOSCOW. Dec 22 (Interfax) - The Central Bank of Russia has signed a deal to sell 100% of shares in Otkritie Bank to the VTB Group for 340 billion rubles, the regulator said in a statement.

VTB will pay a cash consideration of 233.1 billion rubles plus federal loan bonds or OFZ worth 106.8 billion rubles at market value for the shares. The deal will close by December 31, provided VTB makes payment in full.

The independent appraiser JSC DRT valued the Otkritie shares at 328 billion-374 billion rubles.

VTB said in a statement that a plan for integrating the banks would be approved after the deal is closed. VTB said nothing would change for Otkritie customers in the near future, and that the bank intended to retain key products and services. The development of the product line will continue based on the VTB Group's technological, product and financial capabilities.

The Central Bank acquired Otkritie in 2017 after bailing it out using a new process involving the specially created Banking Sector Consolidation Fund. The bank received a capital injection of 456 billion rubles from the Central Bank, which hoped to recover some of this money by selling Otkritie's shares and through the courts: in September 2020, the Moscow Arbitration Court granted a claim by the Central Bank to recover 289.5 billion rubles from the former owners and top managers of Otkritie.

The Central Bank had planned an IPO for Otkritie this year, but the sanctions against the bank made is impossible to float shares on the market, while the problem of combining the functions of owner and regulator remained. The deal with VTB, which was willing to buy Otkritie's assets at the market price, will eliminate the conflict of interest. There are also plans to bring Crimea's biggest bank, Russian National Commercial Bank, into the VTB Group as a standalone entity.