Kostin Announces Plans to Merge VTB and “Otkritie” Brokers

Introduction

Russian state-controlled bank VTB has announced plans to merge with Otkritie Broker, the country’s largest independent securities broker. President and Chairman of the Management Board of VTB Bank, Andrey Kostin, revealed the plans for the merger on social media, stating that the deal would help strengthen VTB’s position in the market and provide better services to clients.

The Merger

The merger will involve VTB acquiring 100% of the shares of Otkritie Broker, which has been struggling with financial difficulties in recent years. The deal is expected to be completed by the end of 2021, subject to regulatory approvals. The two companies have been in talks since last year, with VTB reportedly considering several offers from other potential buyers before deciding on Otkritie.

The Impact

The merger is expected to create a stronger player in Russia’s financial industry, with VTB and Otkritie combined having a market share of over 20% in the brokerage and trading sector. This will make the new entity the second-largest player in the market, after Sberbank. The merger will also allow VTB to expand its range of services and further its aim of becoming a full-service bank.

Reaction from the Industry

Industry experts have hailed the merger as a positive development, with many saying that it will help to strengthen Russia’s financial sector. Others have expressed reservations, with some saying that the deal could create a monopoly in the brokerage and trading sector, making it difficult for other players to compete. However, Kostin has dismissed these concerns, stating that the merger will have no negative impact on competition in the market.

Conclusion

The VTB-Otkritie merger is expected to have a significant impact on Russia’s financial sector, creating a stronger player in the brokerage and trading industry. While there may be concerns over the potential for a monopoly, Kostin has reassured the industry and investors that this will not be the case. The deal is expected to be completed by the end of 2021, subject to regulatory approvals.

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Summary: VTB has announced plans to merge with Otkritie Broker, the largest independent securities broker in Russia. The deal, which is expected to be completed by the end of 2021, will make the new entity the second-largest player in the market, with a market share of over 20%. While there have been concerns over the potential for a monopoly, VTB’s Chairman, Andrey Kostin, has reassured investors that this will not be the case. The merger is expected to have a significant impact on Russia’s financial sector, creating a stronger player in the brokerage and trading industry. #BUSINESS