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MDM Bank and URSA Bank will Merge to Create the Largest Bank Holding in Russia

03.12.2008 15:38

 МДМ Банк УРСА Банк 

Today the shareholders of MDM Bank and URSA Bank announced their intent to combine their equity stakes into a bank holding company, creating one of the leading private universal banks in Russia.

After the merger is completed, the combined bank will become one of the largest financial institutions in Russia, with assets of RUB 523 bln, and RUB 72 bln in capital.

The merger of two strong and respected institutions is the result of a carefully considered strategic analysis, and the decision will establish a more attractive market position for both banks to implement their long-term development plans.

MDM Bank and URSA Bank are complementary both in their business focus and competencies and in their geographic reach. Together the banks will benefit significantly from economies of scale and from the combined commercial and financial activities of the two institutions. The merged bank will take advantage of a large and diversified funding base served by a network of nearly 500 branches in every federal district of the Russian Federation.

In the first stage of the transaction, the shareholders will contribute their respective shares to a holding company. The holding company will oversee the integration process, and its board of directors will include representatives of the shareholders of both banks, including representatives of the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD).

A detailed integration plan will be developed simultaneously with the formation of the common holding company. The full integration of the two banks is expected to be complete within 12-18 months. During this period, both banks will continue to function independently.

Oleg Viyugin, the chairman of the board of directors of MDM Bank, will become chairman of the board of directors of the holding company.

Igor Kim, the chairman of the board of directors of URSA Bank, will become the CEO of MDM Bank and will be responsible for developing and executing the integration plan.

Igor Kouzin, the current CEO of MDM Bank, will become the CEO of the holding company.

Completion of the transaction remains subject to obtaining the necessary approvals and consents, including those from the Central Bank of Russia and the Federal Antimonopoly Service.

Sergei Popov, deputy chairman of the MDM Bank board of directors said: “Igor Kim and I have spent a great deal of time discussing our common goal of creating one of the leading private Russian banks with significant competitive advantages, capable of playing an important role in the development and modernization of the country's banking sector. To accomplish this goal, the bank will draw on the experience and know-how of the top talent available. During the course of our conversations we came to the understanding that we share the same goals and we defined the values that will characterize the combined institution. These values include adherence to the highest international standards of corporate governance, superior customer service, consummate professionalism, and dedication to social responsibility. These shared values and ambitions form the foundation for our partnership.

Oleg Viyugin, the chairman of the board of directors of MDM Bank, said: “This decision has been strategically vetted and is supported by the boards of directors of each bank. Both banks share high standards of corporate governance. These standards will be preserved, as the directors and shareholders see them as key elements of the strong reputation of the combined institution among its clients, creditors, and regulators.

Igor Kim, the chairman of the board of directors of URSA Bank said: “This merger is a step into the future. Sergei Popov and I are in full agreement on our goals. We are fully convinced of its success and are prepared to start work on this unprecedented integration project, which has no equal in its size and importance. We have the resources necessary: the excess liquidity of MDM Bank, which is close to $1.5 bln, and URSA Bank, approximately $1.3 bln, create a substantial reserve for further development together.

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16.12.2009 12:01

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