Russia’s Federal Anti-Monopoly Service has granted approval for establishing the largest private bank in the country. Yulia Bondareva, head of the FAS financial markets oversight department said that the agency has extensively analyzed the merger of MDM Bank and URSA, and there are no reasons to impose any restraints on the transaction.

The executives of the two private banking institutions laid out a plan for the merger in early December 2008. Shareholders have later approved the merger decision. As a result of the transaction, the largest Russian privately-owned bank will be formed. The bank’s assets will total about 523 billion roubles. The capital will be 72 billion roubles. The merged entity will be Russia’s tenth largest bank.

The new bank will have as many as 500 regional branches in all of Russia’s federal districts. Merger should be completed by the end of 2009. Complete details of the merger have not been disclosed to the public yet. The ownership structure of authorized capital of MDM Bank and URSA includes many private and commercial entities. The division of their stakes in the new bank is not known.

Currently, the assets and equity of MDM Bank are greater than those of URSA. As of quarter 1, 2009, MDM’s assets totaled RUR 300.8 billion and its capital was RUR 38.4 billion. URSA’s assets were about 30 percent less, RUR 203.9 billion. URSA’s capital was RUR 21.4 billion. MDM is considered to be Russia’s 13th largest bank, while URSA takes only the 21st place. Since MDM’s assets and capital exceed those of URSA, the bank’s current shareholders will be entitled to larger stakes in the new holding company.