Russian Zombie Bank is reborn, preparing for an IPO
He is alive!
Otkritie (which means invention in Russian), once one of Russia’s leading nongovernmental organizations, has died and gone to heaven (at the Russian central bank) and is now being reborn. Otkritie is reviving and preparing to withdraw from the regulatory body at the Central Bank of Russia (CB). The initial placement is now complete.
They will be listed on the Moscow Exchange. This Biggest Success, I’m sure.
The Central Bank of the Russian Federation took the Opening in 2017. At the time, it was the 8th largest lender in the country. At a time when the bank hit the wall after acquiring the insurance company RoscoeStrock and the national bank, the strategy used an aggressive strategy for many years. From 2015 to 2017, Otkritie’s balance sheet almost tripled. The central bank under the leadership of Elvira Nabiullina was autonomous in that private sector banks would bite off more than they could chew, leading to a banking crisis in Russia. She was one of the leading architects, destroyed dozens of private banks and kept them under the control of the Central Bank of the Russian Federation for many years in order to clear them.
Transfer of “Otkrytie” to state control of the role of the state in the banking sector of Russia to a level not seen since Soviet times. Now we are heading in a different direction again.
Otgriti grew up in Moscow after Gorbachev. It emerged from the explosion of the Soviet system, when many enterprising Russians quickly began to accumulate capital and build new business empires, new or ashen, that were previously under state control.
The pre-Russian Gorbachev Bank had only one state bank with subsidiaries provided that served the entire Soviet economy. In the 2000s alone, about a thousand private financial institutions began to emerge across the country. The opening was the only one thanks to the attention of his Moscow corporate bank at that time.
The Asian Tiger Crisis, the 2008 housing crisis, led to the collapse of the mortgage-backed derivatives market in the United States and Europe, all with their own consequences for Russian banks, which often borrowed in dollars and euros from American and European lenders.
The banking system in Russia has been unstable for ten years, and many banks have collapsed and lost (or stolen) their clients’ money.
It was then that the Prophet stepped. His goal was to take over the central bank in 2012, clean up the private banking sector, and change its governance model. The opening was the most popular of the first large banks to be seized.
“We have to destroy these zombie banks, we will do it one by one,” said Ksenia Yudaeva, then the first deputy chairman of the Central Bank of Russia, who was educated at the Massachusetts Institute of Technology. Most of these banks are not listed on the stock exchange, so they do not have much market influence, except that it helps to raise money that is the best in Russia, but also used by the bank in a controlled manner.
Over the past five years, the value of Sberbank shares in dollars has grown by 38.6%, and VanEck Russia ETF (RSX) – by 30%.
The CBR ruthlessly seized licenses and closed small regional and large banks during the five-year period ending in 2017. Otkritie was the largest ATM to be acquired and was later considered the “bankrupt” of Moscow.
At that time, thanks to an aggressive M&A program, Otkritie had more than $ 50 billion in assets, which is a lot.
When the news came that the Central Bank was considering the possibility of taking it away, customers took money from the bank, and he began to connect. In the usual fashion, his masters left the country.
Vadim Belev and his partner, senator and tycoon Boris Minds, are the key people behind Ogrit. They started it in 2006. As of 2013, the bank was widely viewed as a vehicle for Russian businessman Anatoly Subais and was considered Boris Yeltsin’s right-hand man in negotiations on Russian reform with the International Monetary Fund in the 1990s. Economy. Chubais later became a partner of Otkritie, a fact that was confirmed in a brief statement in 2013 when Chubais announced that he had sold his position to Belyaev and Ruben Aganbegyan, a former bank manager.
Ben Aris of BNE IntelliNews, speaking of the 2017 acquisition of the bank, said Subais played a key role in Russia’s infamous debt privatization during the Yeltsin years. As you know, he allowed the oligarchy Boris Berezovsky to privatize the telecommunications company Svyazinvest. He was considered close to Moscow’s well-developed business / political forces. Commission for a “book advance” of $ 100,000 from the famous billionaire Vladimir Botanin. Write about the privatization of post-Soviet Russia in the 1990s.
Some commentators have suggested that one of the reasons for the delay in the takeover of the Central Bank was the fact that Nabiulina worked as Subais’s deputy in the Commission on Economic Reform in the 1990s and did not want to lose her friendship. Aris writes: “The Bank of Russia is very generous about the Discovery” and provided adequate funding to save it.
It is not yet clear, will be included in the “Discovery”, non-members of these players still. Added a new management team.
The Otkritie situation is sometimes compared to the decision of the US government. 40% of Citigroup shares To pay off capital when the US mortgage crisis hit in 2009.
In the summer of 2017, the Central Bank took full control of Otkryti. It took about two years to clean it.
Nabiulina is proud to have preserved the Russian banking system. Not only has Otkritie survived, the bank is said to be in very good shape and ready to leave the Central Bank’s nest.
The Central Bank removed the bank’s balance sheet, combining all problem assets into a “bad bank” trust, and collected 221 billion rubles from assets, currently 482 billion rubles.
The discovery is lively. It is often considered by Russian investors to be one of the most transparent banks. Despite the fact that the company is actively investing in technological and information infrastructure, it is reviving as a banking business with a large network of offices in all regions of Russia.
Otkritie successfully operates an asset management and securities brokerage business with a focus on retail clients. This side of the business now accounts for a significant portion of the company’s revenues.
According to the latest data from the Central Bank, Otkritie almost doubled its net profit to 58.7 billion rubles ($ 832 million) in the first nine months of 2021. The net interest rate increased from 3.9% to 4.8% in 2020. The opening is constantly being established. Received by CBR Bootcamp.
The next step is to reduce the CBR’s ownership stake.
In 2019, Nabiullina, once considered World’s Leading Central Banker by Euro Money Magazine, Said that the ultimate goal is to bring “Discovery” to the public. This should have happened last year. Then an epidemic broke out. Everyone in hell is free. We know learning.
One of the fastest growing banks in Russia will go public, probably within a year. Its shares will be the same when the United States reduced its stake in Citigroup until there is nothing left.
After the financial crisis, the city’s share almost doubled. If Otkrytie’s IPO takes place and the bank is able to see the same decision of the investor, it may be a growing market, barbaric throughout Russia.