"We have accepted the application [from VTB] on the condition that it will observe legal competition regulations on the deposit market and in relation to other funds attracted in the Smolensk Region [260 miles southwest of Moscow]," the agency said in a news release.
VTB bought 25% of Promstroibank shares in March and planned to expand the stake to 75% by the end of the year in accordance with a two-step purchase deal the two banks signed in September 2004.
VTB Chief Executive Andrei Kostin said earlier that the deal would make VTB the largest bank in St. Petersburg and the Leningrad Region around it.
With its new plan, VTB is looking to be among Russia's five largest players on the insurance market, although the bank has yet to decide on a game plan, Kostin said.
VTB is one of the largest banks in Russia, with a base capital of about 42.1 billion rubles ($1.4 billion). It has an extensive chain of subsidiary branches, including five foreign branches - in Switzerland, Cyprus, Austria, Luxembourg and Armenia. VTB is also an affiliated bank in Germany and has representative offices in Italy, China, Ukraine and Belarus.
Promstroibank is the leading privately-owned bank in northwestern Russia and one of the top 10 banks in the country, with assets totaling $3.6 billion, net loans of $1.9 billion and shareholder equity worth $300 million in 2004.
