Ukrsotsbank & UniCredit: The Name Game

Well, after the fourth day at my internship in Kiev, I have finally sorted out the identity of my current employer, and now understand the hidden complexities behind the names of both <<Ukrsotsbank>> and it's sister corporation, <<UniCredit Bank.>>

In starting my new project about the PR and corporate identity challenges that both banks will face during their upcoming (and long-awaited) merger, I researched the history of UniCredit Group's operations in Ukraine. While this might be somewhat boring for some readers of my blog, I nonetheless wanted to post about it, if only to explain the history for my own benefit.

In 2007, the bulge-bracket Italian bank UniCredit Group (sometimes referred to as just "the Group" here) was operating in Ukraine through three different banks: UniCredit Bank (originally established in 1997 with Polish capital); the branches of HVB Bank Ukraine; and the branches of PJSC Ukrsotsbank, set up in 1990. The latter two banks were acquired by UniCredit Group within Ukraine. However, while HVB was quickly merged with UniCredit under the latter name, Ukrsotsbank--which UniCredit purchased from famous Ukrainian billionaire and oligarch Viktor Pinchuk for $2.07 billion--retained its former name, both operationally and legally. Since Ukrsotsbank had better name and brand recognition in Ukraine than HVB did, it made sense at the time.

Ukrsotsbank was one of the few banks in Eastern Europe to remain strong and profitable during the global recession--no small feat, to be sure. It was regarded as one of the strongest, if not necessarily largest, banks in Ukraine, with one of the most sound balance sheets and capital reserves. However, in 2011 UniCredit Group announced that it was rebranding Ukrsotsbank under the UniCredit Bank name, as simply the next step in the strategic integration process of UniCredit operations in Ukraine. Since then, all Ukrsotsbank branches bear the UniCredit name, thought legally the company is still PJSC Ukrsotsbank, and the shares on the Ukrainian national stock exchange trade under the Ukrsotsbank name.

Hence, the confusion over the identity of Ukrsotsbank vis-a-vis UniCredit Bank vis-a-vis UniCredit Group.

Italian parent banking group, which previously operated in Ukraine through....

 HVB Bank merged with UniCredit Bank in 2007...

leaving two bank brands...

And soon, Ukrsotsbank will merge with UniCredit Bank, leaving only the UniCredit Bank name in Ukraine 

A formal, legal merger of Ukrsotsbank and UniCredit Bank was announced at the time of the rebranding, but like all merger processes--especially in finance--it has taken longer than expected to complete. However, the merger is expected to be complete sometime in the next year, and my current project at the Corporate Identity office of Ukrsotsbank is to investigate and report out about various PR and client/investor relations issues the bank might face during the merger process.

In conducting the research for my project, I came to realize that my previous posts here on Send Me the Cabbage were inaccurate. Technically--legally speaking--I am currently interning at PJSC Ukrsotsbank, which operates under the UniCredit Bank name; and both Ukrsotsbank and UniCredit Bank are subsidiary operations of UniCredit Group.

Понятно?

To play off of an old Foxtrot comic...the key to working in corporate identity is knowing the identity of your corporation. I'm hopeful I can help guide Ukrsotsbank and UniCredit clients and shareholders through the merger process and help strengthen the market share of the UniCredit Group here in Ukraine.