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bne September 2017 Cover story I 27
annualised ROAE of a whopping 24.8%, as well as record high returns on equity.
But, “the temperature is not the same in all the rooms in the hospital,” as Russian bankers like to say. If there is a problem then it will come from the commercial banks, as Otkritie
has already demonstrated.
Rescued earlier this year Peresvet Bank reported the biggest loss in July of RUB8bn, mainly Among specialised retail banks, Tinkoff, Rencredit, OTP and Home Credit had healthy profits equal to 2%-4% of equity, while con- sumer lending pioneer Russian Stan- dard was breakeven, according to Fitch.
All 10 systemically important banks complied with capital requirements
in July including buffers (core Tier
1 6.1%, Tier 1 7.6% and total ratio 9.6%), Fitch reports. Commercial bank
Promsvyazbank was in the worst shape, with a too small cash cushion of Tier
1 capital ratio at 8%. But the bank has already dealt with this problem by issu- ing a $500mn perpetual bond in August that was added to tier 1 capital. Non- systemically important banks' require- ments including buffers for core Tier
1, Tier 1 and total ratios were slightly
requests – has been improving in the last year. However, the sector’s CAR remains in the low teens, above the mandatory minimum of 10% but well off the 15%-20% banks main- tained before the 2008 crunch.
All of which is encouraging, but clearly there are some time bombs ticking
lower at 5.75%, 7.25% and 9.25%, respectively, but still good enough.
In general as the chart shows the capital adequacy ratio (CAR) of banks – the cash they keep to meet withdrawal
in the sector. Since taking over CBR governor Elvira Nabiullina has close over 300 banks, but each one usually has around $1bn hole in its balance sheet. With Otkritie the CBR clean up campaign is moving into the really
“The temperature is not the same in all the rooms in the hospital”
The Owners
Otkritie has an unusually diverse shareholder structure for a Russian bank and includes some of Russia’s most successful businessmen. These are not oligarchs in the traditional sense – men that made money from their close ties to government or by grabbing an oil company in the 1990s. The men are
all wheeler-dealers who became rich from wise or timely investments. Still, they are all also able to do deals in the Russian context.
Otkritie played several roles. It is a real banking business with the second largest commercial bank deposit base and an active player on the securities market, but it also a convenient home for rich people’s money.
Oligarchs need a bank but most are shy of using the state- owned behemoths and basically giving their secrets away to the Kremlin. Many oligarchs set up their own banks — Nickel mag- nate Vladimir Potanin’s Uneximbank and later Rosbank, Mikhail Khodorkovsky’s Menatep, Mikhail Fridman’s Alfa Bank are some examples — but many more notable oligarchs have never owned a bank. A handful of leading Russian banks emerged to service this particular niche and Otkritie was one of these.
What is remarkable in the Otkritie story is that no one has men- tioned young reformer and former deputy prime minister Anatoly Chubais’ name. Otkritie was for years considered to be Chubais’ pocket bank, as multiple sources confirmed to bne IntelliNews over the years. Chubais was a shareholder until 2013.
The other oddity of the bank is its extremely close relationship with VTB Group, which owns 10% of the bank and financed many of the deals that made it so big so fast.
The shareholder structure remains opaque, but according
to Russian language reports 66.4% of the bank's shares are owned by seven individuals or their legal entities. The biggest shareholder is now Vadim Belyaev who has been working
with the bank since 2001 (26.71%). The others are LUKoil investment vehicle IFH Capital (19.90%) and the Lukoil-Garant pension fund (7.06%); the bank’s general manager Ruben Aganbegyan (7.96%); industrial entrepreneur Alexander Nesis (7.34%); Russian financier Alexander Mamut (6.67%); and three members of the management Sergey Gordeev (6.38%), Dmitry Sokolov (4.67%) and Alexei Gudaitis (2%).
Anatoly Chubais
Vadim Belyaev and his partner, senator and real estate magnate Boris Mints, have been credited with starting the bank in 2006. However, until 2013 the bank was widely regarded as a vehicle for Anatoly Chubais.
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