Azernews.Az

By Bloomberg

Vozrozhdenie Bank said management should explore a merger with Absolut Bank, a deal that would create Russia’s 20th largest lender.

Management of the bank was “instructed to thoroughly analyze and investigate the proposal,” Otar Margania, chairman of Vozrozhdenie’s board of directors, said in a statement on its website. A final decision will be taken in one of the upcoming board meetings, the bank said.

Vozrozhdenie’s shares climbed as much as 35 percent to 530 rubles by 1:33 p.m. in Moscow, gaining the most since March 6. Officials for privately held Absolut Bank couldn’t immediately be reached for comment.

The pace of Russian banking mergers is accelerating as the industry is squeezed by sanctions and souring loans amid Russia’s first recession in six years. Credit Bank of Moscow is close to acquiring UralSib Financial Corp., Russia’s 25th largest lender, Kommersant reported on May 15. PAO Promsvyazbank, Russia’s 11th largest by assets, is in talks to buy Pervobank, Vedomosti reported on May 20.

Absolut Bank, Russia’s 40th largest by assets, and Vozrozhdenie, which ranks 41st, are focused in Moscow and the Moscow region. Based on their assets as reported by Banki.ru, the combined entities would become the 20th largest.

Vozrozhdenie reports earnings under international accounting standards on May 27.