July 10, 2017 / 9:06 AM / in 15 days

Russian state bank VEB to merge two lenders

2 Min Read

YEKATERINBURG, Russia, July 10 (Reuters) - Russian state development bank Vnesheconombank (VEB) plans to merge two commercial banks it owns, Globex Bank and Sviaz Bank, and sell the combined lender, VEB Chairman Sergey Gorkov said on Monday.

VEB is under Western sanctions over the Ukraine conflict and is selling assets.

It has been grappling with a mountain of bad debt after financing projects such as construction at the Sochi Winter Olympics.

Gorkov told reporters in the city of Yekaterinburg in Russia's Urals region that Globex Bank and Sviaz Bank would be profitable this year after a long period of loss.

VEB is still finalising the process of finding a buyer for the merged banks, Gorkov said, declining to name the potential buyer.

VEB has received state support from the Russian budget. In 2016 its previous management was sacked and replaced by a team of executives, including Gorkov, from Russia's biggest lender, Sberbank. (Reporting by Polina Nikolskaya; writing by Alexander Winning; editing by Jason Neely)

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