Russian Railways-controlled KIT Finance could be folded into Absolut Bank once the bank’s rehabilitation procedure is complete in 2014, KIT Finance’s press service told Banki.ru.
“Folding KIT Finance into Absolut Bank in 2014 after the rehabilitation procedure is carried out in full is the most likely and logical scenario," said the lending institution. According to Yury Novozhilov, executive director at private pension fund Blagosostoyanie, this could take place in the second half of 2014.
“We’ve never concealed that we’re exploring the possibility to bring KIT Finance and Absolut Bank under one roof. But this will possibly relate to the completion of KIT Finance’s rehabilitation program by mid-2014," Prime quoted Novozhilov as saying.
Private pension fund Blagosostoyanie is 100% controlled by railway monopoly Russian Railways. At the same time, Russian Railways holds a 19.29% interest in KIT Finance. The remaining 80.27% of the lending institution’s shares are in the hands of management companies Transfingroup, Transfincapital, Kapital, Trinfico that act on behalf of Blagosostoyanie.
For the record, in late May 2013 Blagosostoyanie bought Absolut Bank, a Russian subsidiary of Belgian group KBC, for €300 mln.
KIT Finance turned out to be on the verge of bankruptcy in September 2008, and the lending institution’s rehabilitation cost the government Rub 135 bln. The bank has been under rehabilitation until now. Based on Banki.ru data, KIT Finance’s net profit slid 82.38% from January through August and totaled Rub 120.7 mln as of September 1. The lending institution’s credit portfolio grew 6.06% to Rub 51 bln by September 1, 2013. At the same time, during this period the bank cut NPLs in its credit portfolio by 10.37%.
