Rostelecom to enter banking market?

Rostelecom to enter banking market?

Russian operator Rostelecom may acquire a unit of Bank Rossiya as part of its latest strategy to develop a banking services business, Reuters reports.

Local reports claim that the company is in talks with Russia's Bank Rossiya for the sale of its subsidiary, Sobinbank.

Rostelecom has confirmed plans to start running financial services, but declined to comment to local reporters on any potential partners.

A successful acquisition would strengthen the relationship between Rostelecom and Bank Rossiya, which, according to an unnamed source, plans to buy Tele2 Russia and merge it with Rostelecom's mobile unit.

"Bank Rossiya will act as the main buyer," the source told reporters. "Maybe someone else [will buy a stake in the company], but bank Rossiya will eventually control Tele2 Russia."

Yuri Kovalchuk – a St Petersburg banker and associate of Vladimir Putin – heads up Bank Rossiya, and a spokesperson for the bank told Reuters it was looking at the possibility of creating a mobile bank on the basis of Sobinbank, but did not elaborate further.

In December last year, rival Russian operator MegaFon launched its own mobile payment service platform, and is thought to be in talks to start a bank to cross-sell services to existing customers.

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