UPDATE 1-Russia's Nomos teams up with PPF, scraps IPO

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MOSCOW/Nomos Bank, Russia's 20th-largest by assets, has scrapped a planned initial public offering and will instead form a joint holding company with the Czech PPF Group, the two firms said on Thursday.

"PPF Group and shareholders of the Nomos Bank are planning to join forces to create one of the largest universal banking groups in Russia," they said.

PPF's Russian unit Home Credit and Finance Bank and Nomos will contribute to a new holding company, mutually owned by the PPF Group and the Nomos shareholders, it said.

The banks said they would continue to operate separately, and a complete merger was not on the cards at present.

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

The banks said their relative stakes in the new company would be determined after an audit for the first half of 2007.

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.

The IST group, whose beneficial owners are Alexander Nesis, Alexei Gudaitis, Nikolai Dobrinov and Mikhail Ushakov, owns a 50.1 percent stake in Nomos.

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.

PPF is the largest privately held Czech financial group. It is controlled by Petr Kellner, the Czech Republic's richest financier, who was appointed to the board of leading Italian insurer Generali following the combination of his Czech insurance business with Generali's central European assets last month.

[PRAGUE/Reuters/Finance.cz]