Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict

Russia’s central bank is holding discussions with VTB Bank on the terms and conditions for the sale of Otkritie Bank, Interfax has reported. 

The Central Bank of Russia (CBR) wants to sell Otkritie at market value, CBR governor Elvira Nabiullina said at the St. Petersburg International Economic Forum (SPIEF) 2022.

The US-led alliance imposed severe sanctions on Russia targeting its financial services industry, which forced Moscow to consider merging Otkritie Bank into state-backed VTB Bank.

RNKB, an important Crimean bank, is also part of the proposal. 

“There is currently a discussion on the option of selling the asset in favour of VTB,” the central bank chief said.

Nabiullina noted: “There should be a market valuation, so it is now difficult to talk about what part of the money will be returned. We are ready to sell at market value. It is clear that the situation may not be the best currently, and we had intended to sell on more favourable terms. 

“However, the current circumstances dictate that it is worth selling now despite the situation not being very good because it is not very correct for the Central Bank, which is simultaneously the regulator, to own one of the banks. All the more incomprehensible are the prospects of how it will develop in terms of prospects.”

In 2017, the Bank of Russia rescued Otkritie Bank after it crashed due to bad debt. Ever since the central bank has been trying to sell the bank but the efforts were put on hold in the wake of the Russian invasion of Ukraine. 

“All conditions of the deal will continue to be discussed,” Nabiullina added.

Separately, VTB CEO Andrei Kostin told reporters that the bank, which is subject to sanctions from the west, has enough funds to buy Otkritie.