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May 26, 2017 www.intellinews.com I Page 4
Rosneft issued bonds worth RUB625bn to an un- named intermediary, which then used them as collateral to obtain reverse repo loans from the Central Bank of Russia. The middleman, which the Financial Times revealed was Otkritie, then passed on the dollars to Rosneft, allowing it to raise short-term capital.
Ratings agencies are concerned about the bank’s increased leverage from dealmaking. In late De- cember last year, S&P Global Ratings put Otkri- tie’s ratings under review and threatened to lower them by two notches due to the potential risks of deterioration of the parent group’s portfolio.
Analysts cited the $1.45bn acquisition of Arkhan- gelskgeodobycha, Russia’s fourth-largest dia- mond mine, the purchase of insurer Rosgoss- trakh, and the holding’s participation in a bid to obtain extra funds to salvage Trust Bank, whose ads used to feature actor Willis.
“Otkritie Holding’s potential acquisition of un- profitable Rosgosstrakh’s could undermine the holding company’s positions in terms of capital and creditworthiness, and this, in turn, could exert an adverse impact on Otkritie Banks’s financial profile,” said S&P.
In April, the Russian press reported that Otkritie
increased its stake in Rosgosstrakh to 19.8% from 4.4%, in a move regarded as the beginning of a takeover. Otkritie wants to merge Rosgosstrakh and Trust Bank to create the largest private finan- cial group in Russia with assets exceeding RUB4 trillion and a customer base of 55mn people.
“Size matters,” Ruben Aganbegyan, head of Otkri- tie’s banking operations, told the FT. “The more you have, the bigger things you can do.”
Otkritie, which means “opening” or “discovery” in Russian, is jokily referred to as “zakritie” (closure) amongst the commentariat.
The frontman for the bank is former trader Vadim Belyaev, but it was an open secret that he was do- ing the bidding of Anatoly Chubais, the architect of Russia’s controversy-ridden mass privatisations of the 1990s. Chubais and his associate Boris Mints have supposedly sold out their interests in Otkritie.
VTB, Russia second-largest lender, has stepped in and has been an integral part of Otkritie’s survival and ascent over the past decade. Orkritie can be a useful tool as, unlike state-owned VTB and Sber- bank, it has escaped onerous Western sanctions related to Russia’s aggression in Ukraine since 2014.
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