MOSCOW (Reuters) - Russian state conglomerate Rostec wants to merge its Novikombank with other banks to turn it into a top 10 player in the country, Rostec CEO Sergei Chemezov told TASS news agency in an interview.
Chemezov was quoted as saying Rostec had decided to boost the capital of Novikombank, currently Russia’s No. 35 bank by assets, according to Interfax data.
“In the future, we plan to merge with a number of other banks to create a united large industrial bank ... This merger should increase our assets so that our bank becomes at least the tenth largest in the country,” Chemezov said.
In January, credit ratings agency Fitch downgraded the bank’s rating to B- from B, citing asset quality problems and a lack of adequate capital support from Rostec.
After the Fitch report, Rostec said it would provide additional capital to the bank because of a revaluation of loans to companies that fell under Western sanctions.
On Wednesday, Chemezov said there were not yet targets for the potential mergers.
The central bank is cleaning up Russia’s banking system, which is under stress from Western sanctions and a weak economy. Some 300 banks have been closed over the past couple of years.
Reporting by Katya Golubkova, Editing by Jason Bush and Mark Potter