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.