VTB set to acquire Moscow Narodny Bank
State-owned Vneshtorgbank is set to continue its rapid expansion via a share swap to acquire several foreign banks owned by the Russian central bank, including London-based Moscow Narodny Bank and Paris-based Eurobank.
A VTB spokesperson says: “Vneshtorgbank intends to expand its foreign banks’ network in the EU countries through acquiring participations in MNB, Eurobank and Ost-West Handelsbank in Germany and Donau-Bank in Austria.”
A source at the Russian central bank told Reuters that VTB would swap a 20% to 30% share of itself for the foreign banks, which the central bank would then sell on the market at a later date. “That way we won’t be dipping into the state budget and will partly privatize VTB,” the source said.
VTB has expanded abroad far faster than any other Russian bank. It now has subsidiaries in Armenia, Austria, Cyprus, Georgia, Switzerland and Ukraine and is looking to buy banks in Azerbaijan and Belarus.
Its expansion has been equally fast domestically, where it has moved into the retail market after acquiring troubled firm Guta Bank in 2004, and expanded in St Petersburg through the purchase of Promstroibank this year.
It is reportedly interested in buying MNB in order to develop its presence in the London capital markets, winning mandates to advise Russian companies on Eurobond issues and IPOs on the London Stock Exchange, as MNB has done.