OREANDA-NEWS. February 24, 2010. French Societe Generale (SG) announced a decision to merge its Russian subsidiaries Rosbank (the 11th largest Russian bank in terms of assets) and BSGV into one entity, while retaining two separate brands.  Two other SG franchises -- consumer lender Rusfinance, and mortgage lender Deltacredit -- would become subsidiaries of the new entity. Interros, which controls nearly 35% % in Rosbank, will get an ~18% share in the new bank, reported the press-centre of OTKRITIE Financial Corporation.

View: We believe this is a very timely decision that will help establish a more competitive entity in Russia. The merger would create a top-10 bank, the largest among foreign-owned banks in Russia. Consolidation will provide the bank with synergies and cost efficiencies that will support the group's operations in Russia, a development that would be positive for the sector overall. However, the new bank is thus far undercapitalised, and to maintain its positions in local markets it will require a capital injection. Interros has agreed to provide funding in order to maintain the stake.