Page 4 - bne magazine September 2021_20210901

4 I Companies & Markets bne September 2021
Russia's Bank Otkritie nearly went bust in 2017 and was taken over by the central bank and bailed out. Currently, banks in Russia are making record profits. The regulator is looking to unload the bank or list it to bring the banking sector clean up process to an end.
Bank Otkritie makes comeback with record profits, looks for buyer
Ben Aris in Berlin, Cameron Jones in London
Bank Otkritie reported record profits on August 10 with the Central Bank of Russia starting to actively look for a strategic buyer of a controlling stake in the lender.
However, the bank itself is aiming for an IPO in 2022, to capitalise on the current window of enthusiasm for Russian stocks, according to bne IntelliNews sources close to Otkritie. There has been a string of successful billion-dollar Russian IPOs in the past year as international markets are awash with liquidity and western stock markets are already at all-time highs, leaving little upside for investors.
“The CBR has announced it is looking for a buyer, but it's more likely to IPO given the current market environment,” a source close to the bank told bne IntelliNews.
The RTS has already returned circa 20% year to date, but the bulk of portfolio investment has gone into the financial sector – widely used as a proxy by investors looking to invest into Russia’s economic recovery – and the sector’s shares were up a whopping 57% YTD as of August 10.
The CBR took over Otkritie during the “Garden ring banking crisis” when a series of Russia’s biggest commercial banks ran into trouble and nearly collapsed as part of the regulator’s attempts to clean up the sector.
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The central bank recapitalised them and quickly returned stability to the sector, which came close to a systemic meltdown, but the regulator took the unusual decision to take the banks onto its own balance sheet, though, awkwardly, it is in the position of being both a bank owner and the regulator of the banking sector. The CBR remains keen to unload these
“The CBR has announced it is looking for a buyer for Otkritie, but it's more likely to IPO given the current market environment”
banks and announced last week that it was actively looking for a buyer for Otkritie.
The former owners and state firms are barred from participating in the bank’s privatisation. In theory, the bank should be easy to sell or list as it has been performing well, with the sector as a whole posting the best profits in five years and Russia’s banking titans Sber and VTB both registering record profits in the past month.