The Russian government has approved the acquisition of the Postal Bank by the country’s second-largest lender state-controlled VTB Bank, the head of VTB Andrey Kostin told Rossiya 24 TV channel. 

As followed by bne IntelliNews, this month VTB said it plans to acquire the Postal Bank, formerly run by the Russian Post (Pochta Rossii).

VTB and the Russian Post entered into an agreement on parity ownership of the Postal Bank, which is under full blocking US sanctions since November 2023. The bank has 8.6mn active customers and could boost VTB’s customer base to almost 28mn people (VTB’s strategy is to increase the customer base to 35mn people by 2026).

VTB's strategy for 2024-2026 targets active development in the retail segment with expansion into the regions and “the acquisition of a stake in Postal Bank, which specialises in the retail segment and has an extensive network of post offices, fits into this strategy,” the analysts at Renaissance Capital commented.

In addition, VTB's branch network, which includes 1,645 additional offices and 22 branches, will increase manifold, Kommersant argues. Postal Bank has 333 branches, but thanks to cooperation with Russian Post it has a total of 25,000 service points.

VTB and Russian Post each own 50% minus 1 share in the Postal Bank. Two shares are owned by the bank's head Alexander Pakhomov. As of June 2024, the bank's equity capital was RUB70.9bn, with a net loss of RUB785mn.

Analysts surveyed by Kommersant daily previously estimated the potential value of the deal at RUB27.5bn-RUB29.5bn. The acquisition could also be seen as an indirect way to recapitalise the troubled Russian Post, analysts suggested to RBC business portal.

As followed by bne IntelliNews, Russian Post reported its first loss in nine years of RUB27.2bn ($353mn) at the end of 2022. The company is the second-largest employer in the country after Russian Railways, and was reportedly facing massive layoffs of postmen and branch workers after unfavourable changes to its payroll system.

In the end of 2023 The Audit Chamber report looking into the financial situation of Russian Post (Pochta Rossii) attributed RUB24.5bn out of RUB30.4bn losses posted by the state postal service in 2022 to the "negative effect of management decisions".

According to the state audit, half of the losses were attributed to the failure to lease unattractive vacant space, while other loss-making factors were a sharp increase in salaries in the subsidiaries and the rent of the central headquarters.