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Sogaz purchases the insurance business of the Russian state-run lender VTB

Earlier today, May 25th, Russian state-run lender VTB announced that the company has sold its insurance business to Sogaz.

Sogaz, in turn, announced that this move would make it the largest insurance company in Russia by a huge margin.

As per reports, a massive Rbs550bn ($8.9bn) would be kept under management by the merged company which will perform all operations under Sogaz’s brands.

Commenting on this merger, the chief executive of VTB, Andrei Kostin went on to claim that the deal was worth almost “tens” of billions of rubles, however when asked to give reveal an exact amount, he did not give a comment.

Mr. Kostin then went on to add that, “This deal would be finalized in the third quarter of this year, and once it is done, the deal will provide massive help for us(VTB) to focus on our core banking business.

Backed up with its incredible financial might, it would help Sogaz in securing a firm position on the otherwise struggling Russian insurance market.

Also given the fact that its direct rival,  Rosgosstrakh, posted record losses of Rbs55bn in the previous year, which was one partly involved in the matter of its parent company, Otkritie Bank, pleading for a central bank bailout would prove to be of great advantage for Sogaz.

About the author

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Giselle Picardo

She has completed her masters from North Eastern University and currently employed at Dell EMC. She loves to read, research and writes about finance and business while she is not at work. She keeps TheFinanceDesk updated with the latest news in finance.

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