Russia's Nomos bank stops IPO, to merge instead

...with the Czech PPF Group, a source familiar with the matter said on Thursday.

"The shareholders of PPF and Nomos Bank are taking steps to form a banking group. It's not an acquisition, it's a merger," the source told Reuters on condition of anonymity.

PPF owns Home Credit and Finance (HCF), one of the leaders on Russia's booming market for consumer lending. Foreign banks are circling local players to seek greater exposure to Russia's booming banking sector.

"The stakes of the two sides have not yet been determined -- this will be done after an audit. Nomos Bank and HCF will remain independent banks but will operate as part of a holding company," the source added.

The deal should close in the fourth quarter, pending regulatory approvals to be sought in the near future.

Nomos had been planning a stock market float in the first half of the year and had hired Morgan Stanley and Deutsche Bank to organise the offering.

A 50.1 percent stake in Nomos belongs to the IST group, whose beneficial owners are Alexander Nesis, Alexei Gudaitis, Nikolai Dobrinov and Mikhail Ushakov.

Former bank president Igor Finogenov owns 19.5 percent, supervisory board chairman Dmitry Sokolov 16.8 percent, and private investor Igor Tsyplakov another 10.3 percent.

[MOSCOW/Reuters/Finance.cz]