Russia considers bank to hold 'non-core' assets of bailed out Otkritie and B&N

MOSCOW (Reuters) - Russia's central bank is considering merging parts of bailed out lenders Otkritie and B&N Bank to create a business that would hold their unwanted assets, making it easier to turn around, and eventually sell, the remaining operations.

The central bank is looking at merging Otkritie's Trast business with B&N's Rost to hold the "non-core" assets of the two banks, Otkritie said in a written response to a Reuters request.

The plan is "being currently discussed", it said, without giving other details. The central bank declined to comment.

The central bank said last month it was considering merging Otkritie, the largest of the banks it bailed out last year, and B&N Bank, and moving their toxic loans into a separate "bad bank," yet to be established.

Russia's banking sector is being closely watch by investors after three bailouts last year that the central bank has estimated could cost it more than 1 trillion roubles ($17.4 billion).

The central bank has said it plans to sell Otkritie and B&N after they are restored.

The third bank that was rescued, Promsvyazbank, will serve the defence sector to protect the country's top two lenders, Sberbank and VTB, from a possible expansion of Western sanctions, the finance minister said last month.

(Reporting by Tatiana Voronova; Writing by Katya Golubkova; Editing by Mark Potter)