Lebedev Snaps Up Small Bank

Billionaire Alexander Lebedev has acquired control of Russian Capital bank as the state seeks to consolidate the banking industry amid the worst financial crisis in a decade.

National Reserve Corporation bought a majority stake in Russian Capital, which was experiencing liquidity difficulties, for a "symbolic fee," Lebedev's banking unit, National Reserve Bank, said Wednesday in a statement.

The buyout follows the effective nationalization of four other midsized banks, with VEB purchasing Globex and Svyaz Bank, state monopolies Russian Railways and Alrosa gobbling up KIT Finance, and Gazprom's banking unit snapping up Sobinbank.

First Deputy Prime Minister Igor Shuvalov, the chairman of a recently created presidential council to develop the country's financial markets, said Tuesday that the state would aid banking industry consolidation, the statement said.

"This is our response to the actions of the government and Central Bank to revive the situation on the Russian financial market,'' Lebedev said.

Lebedev said he was interested in the bank because of its large client base and its network of 53 branches throughout the country, Interfax reported. Ownership of Russian Capital, which is ranked 99th on Interfax's list of the country's 100 largest banks, will be handed over to NRB on Monday, when it will begin to settle outstanding transactions with clients, NRB chairman Arkady Kolodkin said.

(Bloomberg, MT, Reuters)