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Otkritie FC Bank

From Wikipedia, the free encyclopedia
For the parent company of the bank, see Otkritie Holding.
Bank Otkritie Financial Corporation
Native name
ПАО Банк «Финансовая Корпорация Открытие» (Банк «ФК Открытие»)
FormerlyNOMOS-Bank
Company typePublic Joint-Stock Company
LSE: OFCB, MCX: OFCB
IndustryBanking
FoundedDecember 15, 1992; 31 years ago (1992-12-15)[1]
Headquarters
Moscow
,
Russia
Key people
Mikhail Alekseev (CEO)[2]
ServicesFinancial services
Revenue$3.76 billion[3] (2017)
$758 million[4] (2016)
$22.4 million[4] (2016)
Total assets$40.3 billion[4] (2016)
Total equity$3.46 billion[4] (2016)
OwnerVTB Bank
RatingBa3 (Moody's), BB− (S&P) (2017)[5]
Websiteopen.ru

PJSC "Bank Otkritie Financial Corporation"[6] or Otkritie FC Bank (Russian: Банк «ФК Открытие», translates as opening or discovery) is one of Russia's largest full-service commercial banks.[7] It has more than 440 offices of different formats in Russia.[8] It was co-founded by Igor Finogenov, now CEO of the Eurasian Development Bank.[9]

Otkritie Bank ranked 1st among privately owned banks and 4th by assets among banking groups in Russia.[10] In August 2017, Otkritie was bailed out by the Central Bank of Russia,[11] at a cost to the state of over $8 billion.[12] The central bank later described Otkritie's capital as "largely fictitious".[13]

History

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Nomos bank office in Moscow
Nomos bank office in Perm

The lending institution was registered as TIPCO Venture Bank (Russian: ТИПКО Венчур Банк) in 1992. The bank was renamed in 1994 as joint stock investment commercial bank Novaya Moskva (Russian: Новая Москва, Russian for New Moscow), and Nomos-Bank (Russian: Номос-Банк) in 2007. ICT Group (Alexander Nesis is a co-owner) gathered a controlling stake in the bank in May 2006.[14]

Otkritie Holding

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In 2012 Otkritie took over NOMOS-Bank,[15] using a $1bn loan from VTB Bank.[16]

In 2014 NOMOS-Bank was renamed to Otkritie Financial Corporation Bank.[17]

In 2014 the Bank of Russia picked Bank FC Otkritie to rescue National Bank Trust.[18]

Otkritie allegedly became Russia's largest private bank in late 2014 by buying 625 billion rubles in bonds from the state oil company Rosneft, using them as collateral to obtain reverse repo loans from the Central Bank of Russia, then passing on the dollars it received to Rosneft, which is not allowed access to international capital markets due to international sanctions.[16] As repo funding had a 2.5% interest rate and the bond had a 7.5% coupon, Otkritie made billions from the trade.[16]

In 2015, all in all, Otkritie Holding's banks lay claims to get a big share of government aid among all private banks (Rub 65.2 bln or 7.8% of the government program).[19]

Acquisitions

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Further information: Otkritie Holding

In 2016, Financial group has completed the legal takeover of Khanty-Mansiysk Otkritie Bank by Otkritie FC Bank. As the financial group's press service reported, the merged bank would hold total assets of Rub 3.1 tln.[19]

In December 2016 Otkritie Group and Rosgosstrakh Group (the Russia's largest insurance company) agreed to merge.[20]

Outflow of liquidity

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Otkritie experienced a significant outflow of liquidity in July 2017, after it was assigned a BBB− rating by ACRA.[21] According to the Financial Times, senior managers of Otkritie have removed their personal funds from the bank.[22] By late August Oktrikie shares had fallen to a 20-month low.[23]

On 29 August 2017 the Central Bank of Russia announced it would take over administration of Otkritie.[24][25]

In August 2021, the Central Bank of Russia announced the launch of preparations for the sale of Otkritie FC Bank, as well as the dates for accepting applications from potential shareholders from 11 to 22 October of the same year. The regulator is studying options to sell Otkritie FC Bank shares through organized listing and alternate ways for selling its shares to a strategic investor.[26]

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The state-owned VTB Bank had a 10% stake in Otkritie's parent company, later written off after the 2017 bailout.[13] In 2018, it was revealed that Otkritie had amassed an undisclosed 20% stake in VTB Bank, making it the bank's largest shareholder after the Russian government.[13] Otkritie's rapid rise had been aided by cheap loans from VTB.[13]

The purchase of VTB stock costed Otkritie tens of billions of rubles, but helped boost VTB's stock price, which had lagged behind its domestic competitors. The stake in VTB was spread between Otkritie's various subsidiaries, to avoid reaching the 5% threshold for mandatory holdings disclosure.[13]

In December 2022, the Bank of Russia withdrew from the capital of Otkritie Bank, 100% of the shares were transferred to VTB.[27]

Ownership

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Before the bailout, owners included the Czech PPF Group (29.9%)[28] owned by Petr Kellner, the Slovak businessman Roman Korbačka (20%),[29] and the Russian ICT Group (50.1%) of which Alexander Nesis is President.[30]

Lawsuit

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Although Boris Mints, co-founder of the bank, had sold his shares in the bank in 2013, he allegedly still had a relationship with Otkritie. In a lawsuit in the High court of the UK, the central bank alleged that Mints' company, O1, had sold bonds to the banks as a "fraudulent scheme" to pay off its debt just days before the collapse, according to a Financial Times report.[31] An earlier report in February 2019 had stated that the banks were alleged to have sustained "losses from purchasing large amounts of O1 and Otkritie Holding assets".[32]

In June 2018, Russia petitioned the UK court to freeze £470 million of Mints' assets, including a mansion in Perthshire, Scotland, known as the Tower of Lethendy. The court agreed only to an injunction prohibiting Minsk and his three sons from disposing of assets, including the mansion. The Tower of Lethendy is only one of 140 of Mints' properties that the banks were attempting to confiscate. Ownership documents indicate that the mansion is owned by MFT Braveheart Ltd,[33] a company registered in the Cayman Islands. According to the FT report, "Mr Mints and his sons deny committing fraud and are contesting the allegations in arbitration proceedings scheduled to be heard next April in London".[34][35]

Sanctions

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On 24 February 2022 the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Otkritie FC Bank under E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, the GoR, and for operating or having operated in the financial services sector of the Russian Federation economy. Subsidiary companies were also sanctioned.[36] The UK first imposed an asset freeze sanction on 28 March 2022, increased in March 2023 to include trust services and in December 2023 increased them again to include a prohibition on correspondent banking relationships.[37]

Management Board

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Mikhail Alekseyev has been the Board's Chairman since January 1, 2023.

Currency exchange

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In 2014, the bank offered a service called Client Bank, an online currency conversion service. Corporate customers can use Client Bank to exchange currency online.[38]

On October 21, 2013, NOMOS-BANK has been admitted to trading on the Moscow Exchange.[39]

References

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  1. ^ "Справочник по кредитным организациям - Банк России". www.cbr.ru.
  2. ^ "Zadornov to leave Otkritie Bank on Jan 1, former UniCredit head Alekseyev to be nominated as new CEO". interfax.com. 2022-12-22.
  3. ^ "Рейтинг крупнейших компаний России по объему реализации продукции". Expert RA. Archived from the original on 28 October 2018. Retrieved 28 October 2018.
  4. ^ a b c d https://cdn.open.ru/storage/files/FS_2016_ENG.pdf. {{cite web}}: Missing or empty |title= (help)
  5. ^ "Рейтинг банков - 2017 (таблица)". Forbes.ru. 23 March 2017. Archived from the original on 23 May 2017. Retrieved 1 May 2017.
  6. ^ "Bank Otkritie". www.open.ru.
  7. ^ "Bank Otkritie".
  8. ^ https://www.open.ru/en/about[permanent dead link‍]
  9. ^ "Игорь Финогенов: "Я продолжаю быть банкиром"". Archived from the original on 2008-06-24. Retrieved 2008-08-25. (in Russian)
  10. ^ "Based on Interfax – CEA ranking in accordance with RAS financial statements as of March 31, 2016". Archived from the original on 8 November 2016. Retrieved 8 November 2016. {{cite journal}}: Cite journal requires |journal= (help)
  11. ^ "Russia, in one of biggest bailouts in its history, rescues Otkritie bank". CNBC. 30 August 2017. Retrieved 30 September 2018.
  12. ^ Voronova, Tatiana. "Russia's Otkritie Bank calls for more central bank backing". Reuters. Retrieved 30 September 2018.
  13. ^ a b c d e Seddon, Max. "The secret VTB stake that helped lead to Otkritie's downfall". Financial Times. Retrieved 30 September 2018.
  14. ^ "Bank Otkritie Financial Corporation - Банки.ру". www.banki.ru.
  15. ^ "Otkritie Formalizes Nomos-Bank Take Over". Moscow Times. Archived from the original on 4 March 2016. Retrieved 6 April 2017.
  16. ^ a b c "Russia: Inside the private bank backed by the state". FT. Archived from the original on 5 March 2017. Retrieved 6 April 2017.
  17. ^ Otkritie has launched an updated brand platform and renamed two entities in the Group Archived 2014-07-14 at the Wayback Machine
  18. ^ "CBR picks Bank FC Otkritie to rescue National Bank Trust". Банки.ру.
  19. ^ a b "Petrocommerce-Bank FC Otkritie merger put on hold 'cause of risk to lose Rub 9.6 bln of government aid". Банки.ру.
  20. ^ "Otkritie FC Bank looking to pick up Rosgosstrakh Bank assets". Банки.ру.
  21. ^ "Russian bank Otkritie significantly reduces its holding of Russia 2030 Eurobonds". IntelliNews. Archived from the original on 18 August 2017. Retrieved 20 August 2017.
  22. ^ "Otkritie sells stake in Cypriot bank RCB". Ft.com. Retrieved 26 August 2017.
  23. ^ "Shares in Russian bank Otkritie sink to 20-month low". Reuters. Retrieved 29 August 2017.
  24. ^ "О мерах по повышению финансовой устойчивости ПАО Банк "Финансовая Корпорация Открытие"". Банк России. Retrieved 29 August 2017.
  25. ^ "Russian central bank steps in to rescue Otkritie". Financial Times. Retrieved 29 August 2017.
  26. ^ "The Central Bank of Russia launched selling Otrkitie FC Bank". reuters.com. 2021-08-03.
  27. ^ "VTB becomes owner of Otkritie bank — regulator". tass.com. 2022-12-27.
  28. ^ "Russia Finance Corporation to buy 29.923% of NOMOS-BANK additional issue shares". Archived from the original on 2009-01-05. Retrieved 2008-08-26.
  29. ^ "空調服のフィルターを自作する方法／空調服メーカー". Archived from the original on 2009-01-05. Retrieved 2008-08-26. - rounded up to 1 d.p.
  30. ^ [1]Archived 2011-10-04 at the Wayback Machine
  31. ^ "High Court bars Otkritie co-founder from disposing of assets". Financial Times. 2019-07-12. Retrieved 2023-04-06.
  32. ^ "Russia opens criminal proceedings against former Otkritie boss". Financial Times. 2019-02-05. Retrieved 2023-04-06.
  33. ^ ieyenews (2018-02-22). "Cayman Islands firm gets to work on 'Taylor Swift' castle". IEyeNews. Retrieved 2023-04-06.
  34. ^ Midolo, Emanuele. "The Scottish Castle At The Center Of A $700 Million Legal Battle Between The Kremlin And A Russian Tycoon". Forbes. Retrieved 2023-04-06.
  35. ^ "Perthshire country house amidst Russian High Court battle". Scottish Financial News. Retrieved 2023-04-06.
  36. ^ "U.S. Treasury Announces Unprecedented & Expansive Sanctions Against Russia, Imposing Swift and Severe Economic Costs". 24 February 2022.
  37. ^ "Financial Sanctions Notice 15/12/2023" (PDF). 15 December 2023.
  38. ^ Guthrie, Sam. "Nomos Bank launches real-time currency conversion system". Yekaterinburg News. 2/10/2014. Retrieved 2/10/2014.
  39. ^ Waits, Douglas (September 17, 2013). "NOMOS-Bank Eurobonds admitted to MICEX trading". Cistran Finance. Archived from the original on 29 October 2013. Retrieved 25 October 2013.
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