Problems with liquidity experienced by the Russian banking sector amid the ongoing financial crisis have prompted a wave of banking consolidation in the country. Analysts say the number of credit institutions in Russia may contract by a third.
Both banks are on the list of the country's top 30 banks, and the consolidated bank is expected to be a leading national banking institution.
Oleg Vyugin, chairman of the MDM Bank board of directors, will chair the board of the holding company to be established by shareholders of both banks to control the consolidation process.
Igor Kim, currently chairman of the URSA bank board of directors, will chair the management board of the consolidated bank, while Igor Kuzin, MDM Bank CEO, will be general director of the holding company.
The merger will take 12-18 months. During this period, both banks will continue to function as independent entities. The deal will be finalized after all regulatory approvals.