Russia’s second-largest state-controlled bank VTB plans to accelerate the consolidation of its stake in Pochta Bank (Postal Bank) and buy out stakes in the credit institution from Russian Post (49.99 % of shares) and top manager Alexander Pakhomov (two shares) by the end of 2024, RBC business portal reports citing VTB's first deputy chairman Dmitry Pyanov. 

However, the deal still has to be cleared with the Federal Antimonopoly Service (FAS) and the Central Bank of Russia (CBR), but VTB still hopes to close the deal by the end of this year and spend 2025 integrating the Postal Bank, according to Pyanov. 

As followed by bne IntelliNews, in July 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 Postal Bank fits into this strategy.

Pyanov now argues that fully integrating the bank for VTB would be easier to implement after consolidation of 100% of its shares. In addition, as previously suggested by bne IntelliNews, the deal could be sold to the Kremlin as a lifeline for cash-strapped Russian Post.

“With double-digit interest rates, with the expectation that the key rate could be 20% or higher, the sooner Russian Post gets this liquidity, the sooner something good can be made of this cash, if the settlement happens in 2024,” Pyanov argues, as cited by RBC.

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".

As of August 2024, Postal Bank's capital was just over RUB70bn, thus, for a stake of almost 50%, Russian Post could get about RUB35bn.

Postal Bank ranks 23rd in Russia in terms of assets (RUB583bn as of August 2024) and 28th in terms of capital (RUB70.4bn), according to banki.ru. It specialises in working with retail clients and unsecured lending, but for VTB the most attractive is the largest network of branches in Russia, which operate, among other things, on the basis of branches of Russian Post.

Postal Bank has 333 branches, but thanks to cooperation with Russian Post it has a total of 25,000 service points. VTB's branch network, which includes 1,645 additional offices and 22 branches, could thus increase manifold as a result of the merger.