Russia’s MTS Bank Launches IPO Despite Existing Western Sanctions
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Russian-based MTS Bank has revealed its plans to launch an initial public offering (IPO), notwithstanding the existing Western sanctions against Russian financial institutions.
The bank operates as the financial technology division of a well-known Russian mobile phone company. It became the second bank in Russia after Sovcombank to proceed with an IPO since restrictions were enforced on Moscow due to Russia’s raid on Ukraine in early 2022.
MTS Bank Plans To Expand Its Profitable Retail Business
According to reports, early this month, the Russian Central Bank approved the registration of an extra 7.187 million common stocks to MTS Bank, with each valued at 500 rubbles. This represents 19.3% of the bank’s expanded authorized capital.
The bank stated that it would use the funds acquired from the IPO to carry out its growth plans and expand its profitable retail business.
As per information provided by four different sources closely associated with the situation, MTS Bank intended to unveil an IPO in the spring and has the potential to secure up to $160.3 million.
The news comes after 13 Russian-linked cryptocurrency fintech companies were hit with more restrictions by the US Treasury Department.
MTS Bank provides financial services to businesses and individuals in Russia. The firm manages a commercial bank, allowing cooperate and private clients to access services like insurance, remote maintenance, cash management, bank guarantees, funds placement, investment, and current and savings accounts.
The Bank Aims To Expand The Service To Other Areas Within Russia
In 2019, the company introduced a B2B2C project allowing businesses to disburse service fees to self-employed individuals as part of salary distribution.
Later on, the bank allied with Moscow’s Department of Information Technology to introduce an innovative financial service for identifying and settling overdue payments. The primary objective of the project is to offer a wide range of tools for paying for commercial, municipal, and public services.
After the launch of this service, users of the municipal web portal now have the exclusive opportunity to review all their outstanding balances seamlessly on a single page within their account.
They can also settle transactions such as traffic police fines, tuition for nursery schools, children’s extracurricular programs, and a single utility bill in one click.
Taking lessons from the Moscow project, MTS Bank created a payment solution that can be easily incorporated into the Local government’s digital platforms. The bank is also planning to expand the service to other regions within Russia.
