Rostelecom in talks to buy Bank Rossiya unit: paper

Reuters

MOSCOW (Reuters) - Russian state-controlled telecoms operator Rostelecom (MCX:RTKM) may buy Sobinbank, a unit of Bank Rossiya, to develop a banking services business, daily Kommersant reported on Monday.

Rostelecom confirmed it planned to start providing financial services but declined to comment on potential partners.

Kommersant cited unnamed sources as saying talks with Bank Rossiya were under way.

The bank is controlled by Yuri Kovalchuk, a St Petersburg banker whose association with President Vladimir Putin dates back to the early 1990s.

Rostelecom's rival, mobile phone operator Megafon (MFON.MM), said last month it was in talks to start a bank to cross-sell services to existing customers, while another competitor, MTS (NYS:MBT), has already bought a stake in a bank.

A deal would mark a deepening of cooperation between Rostelecom and Bank Rossiya, at which the telecoms group has deposited cash and which in turn plans to buy a stake in rival mobile phone operator Tele2 Russia.

Bank Rossiya has been linked to a possible plan to merge Tele2 Russia with Rostelecom's mobile business - currently the country's fourth and fifth-biggest mobile phone operators respectively behind MTS, Megafon and Vimpelcom (VIP.O).

A spokesman for Bank Rossiya said the bank was studying the possibility of setting up a mobile bank on the basis of Sobinbank among other options and did not rule out that new partners could enter the project. He did not elaborate.

Separately, Kommersant also quoted Rostelecom CEO Sergei Kalugin as saying that the former fixed-line monopoly was considering putting its mobile assets under the management of an unspecified partner to focus on cable TV in a strategy shift.

(Reporting by Maria Kiselyova; Editing by Douglas Busvine and Mark Potter)

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