Shared commercial bank Rossiya, which was registered by the State Bank of the USSR, was founded in 1990 with the participation of the Leningrad Regional Committee of the Communist Party of the Soviet Union. The bank has operated as Joint Stock Bank Rossiya since 1997. The bank has been close to the political elite not only of St. Petersburg, but of the whole country until now.
In August 2010, the takeover of Gazenergobank (see the Memory Book) was wrapped up, and its assets (including Sobinbanks network of branches and shares) and liabilities were assigned to Bank Rossiya. It was initially announced that retail business would be rolled out on the basis of Sobinbank, but despite a government bailout the under-rehabilitation bank suffered a record loss (Rub 2.98 bln) in 2010, and news leaked in June 2011 that there were plans to fold Sobinbank into Bank Rossiya. At the end of 2011, news broke that the takeover was rolled back for several years. As of year-end 2016, in addition to Sobinbank, Bank Rossiya Group comprised leasing firm Kapital, publisher Saint Petersburg Vedomosti, Elektrocentromontazh), leasing company Zest, National Expert Group, etc.
On March 20, 2014 the United States imposed sanctions against Bank Rossiya by freezing its assets being under US jurisdiction, and also by banning the bank to strike deals in US territory or with American citizens. As a result of the actions taken by the United States, international payment systems Visa and MasterCard ceased the service of bank cards issued by Bank Rossiya.
At present, Yury Kovalchuk, former Bank Rossiya board chairman and big Russian businessman (co-owner of Sogaz Insurance Group, Tele2 Russia, National Media Group, and CTC Media), controls 42.28% of the banks shares directly, and also through ABR Management CJSC and a stake held by his spouse, Tatiana Kovalchuk. Gennady Timchenko, a renowned businessman who is on the Forbes List (Top 10 Russian Billionaires — 2015), and a Finnish citizen, holds 10.421% of the banks shares. Nikolai Shamalov controls 8.404% via ABR Management CJSC. Via Akcept LLC and Platinum LLC, Mikhail Shelomov controls in the aggregate an 8.404% stake, and a 6.001% interest is held by Ivan Mironov through Oberon Estate. Alexei Mordashov, the major owner of metals giant Severstal, controls 5.825% of the bank through Severgroup LLC. Tatiana Svitova holds 5.358% of the banks shares indirectly via Overpass-Invest LLC. Famous musician and entrepreneur Sergei Roldugins interest is 3.223%, and Relaks LLC (the beneficial owner is Svetlana Krivonogikh) owns 2.95%. Gazprom investgazifikatsia LLC owns 2.207%, and a 1.144% interest is owned by Gazprom mezhregiongaz Belgorod LLC. The remaining shares (1.94%) are distributed among minority shareholders.
In addition to the head office, the bank runs five additional offices in St. Petersburg. The banks 12 business units cover Moscow and the Moscow region. Moreover, the banks network is comprised of over 50 divisions in various Russian cities and regions, including 20 offices in Crimea and Sevastopol. The lending institutions total ATM network consists of nearly 700 machines (147 in Moscow and the Moscow region, 97 in St. Petersburg and the Leningrad region, and 219 in Crimea and Sevastopol.
A key area of the banks business is corporate lending. The core of the lenders corporate borrowers is strategic and large companies from the real sector of the economy. As regards the sectorial breakdown of the banks loans granted, such segments prevail as manufacturing, financial activities, retailing, real estate, transport and telecommunication (according to the financial statement as of September 30, 2017). It should be added that around half of loans falls to the Central Federal District, and one fourth to the North-West Federal District.
The banks corporate customers, which are Russias biggest strategic enterprises, are Gazprom, Inter UES, Rosseti, Rosatom Group, and Rostec. Over the past few years in various regions the bank has served Bashinformsvyaz, Vodokanal of St. Petersburg, Lenenergo, Motovilikhinskiye zavody, Murmansk TPP, Rosseti, UES FGC, Yantarenergo, Yantarenergosbyt, Interregional Distribution Grid Company of Volga, Zhivoy office, Interregional Distribution Grid Company of Northern Caucasus, Permenergosbyt, Northern Project Management, and some others.
Pursuant to the banks annual report, in 2016 the bank continued to draw funds aggressively from Russian defense contractors as part of the project to develop a system of government orders. In 2016, funds held by defense contractors at the banks accounts climbed by 2.6x to Rub 27 bln. In addition, the bank set up a division to deal with Russian shipbuilders, partnership relations were established with such sector leaders as United Shipbuilding Corporation, Krylovsky State Scientific Center, Baltic Plant — Shipbuilding, Srednenevsky Shipyard, Western Shipbuilding Center, Nevsky Shipyard and Dockyard, and shipyard center Zvezdochka.
The bank provides a wide range of services to businesses, namely cash settlement services, loans, depositary services, services of finance arrangement, remote banking services, securities transactions, documentary operations, leasing services, deposit products for available funds, bank guarantees, and trade finance. The bank offers households the following services: loans (consumer, overdraft, auto and mortgage loans), bank cards (MIR-powered), depositary services, deposit accounts, online banking (via ABR Direct), money transfers (account-based and account-free transfers), safety deposit boxes, settlements using letters of credit in rubles, and operations in the securities market.
Over the past twelve months, the banks assets have jumped by 17% to Rub 868 bln as of February 1, 2018. During the period under analysis, the banks liabilities grew on the back of the inflow of customer funds, above all, balances held on settlement accounts and corporate deposits, and, to a lesser extent, retail deposits. Furthermore, drawn inter-bank loans have climbed by nearly 8x. On the asset side, the bank ramped up corporate lending, and portfolios of granted inter-bank loans and bonds.
2015 through February 2016 the banks assets rose modestly (10.5%) to Rub 574.8 bln as of February 1, 2016. During the period under review the banks liabilities rose amid an inflow of clients funds, first and foremost, corporate deposits and, to a lesser extent, retail deposits. As for assets, the bank bumped up inter-bank loans, its securities portfolio and balances of highly liquid assets. Meanwhile, the banks credit portfolio shrank (-7.7%).
By the balance sheet date, nearly 75% of the banks liabilities fell to funds of businesses and institutions (roughly half of these funds falls to balances held on settlement accounts, and the rest to short-term and long-term deposit accounts). The banks impressive clientele is steadily very active, with monthly turnover from February 2017 through February 2018 averaging Rub 2.4—3.3 tln. Notably, in mid-2014, i.e. when international sanctions were imposed on the financial institution, turnover on accounts of the banks clients nearly doubled. As a result, this turnover has been maintained at this level until now.
Retail deposits account for slightly less than 10% of the banks liabilities, with a big portion drawn for six to thirty-six months. Equity (excluding subordinated loans) accounts for around 6.4% of liabilities. As of February 1, 2018 the banks capital adequacy ratio (№ 1.0) was met nearly at the same margin than a year ago (12.1%, given the minimum № 1.0 requirement of 8%). Notably, in 2015 the bank was put on the list of lending institutions that would get capital injections via OFZ, but the bank failed to take advantage of this program.
The credit portfolio dominated in the banks net assets (43.1% as of February 1, 2018). Securities account for 27.7%, 15.5% of net assets falls to inter-bank loans granted, balances of high-liquidity assets (funds held on correspondent accounts and cash in hand) account for 5.7%, other assets and fixed assets constitute 7.2%.
As for the credit portfolio, nearly 75% falls to corporate loans. The bulk of the credit portfolio, as in the previous years, falls to borrowers that operate in the real sectors of the economy. Traditionally, the bank specializes in lending big amounts. According to the banks FY16 financial statement, its biggest borrowers were Gazprom neftekhim Salavat, Kirovsky Plant, RIRV, BTK group, BTK Textile, European Stolitsa, ZEST, Kompaniya LIROSS, LIROSS LLC, Gosznak-Leasing, United Energy Technologies, Aerospace Corporation Energia, Sogaz, Rosnano, NPO Angstrem, SevZapFinance, and Buer. Notably, over 61% of the corporate credit portfolio fell to Rub 1+ bln loans, including around 35% to Rub 3+ bln loans. Loans under Rub 500 mln accounted for 22.6% of the credit portfolio.
NPLs are kept at a low level and stood at 3.3% (2.1% a year ago) as of February 1, 2018. Overall, the provision ratio is low, but is in line with NPLs (4.5% as of the balance sheet date, as a year ago). The credit portfolio coverage ratio is average, equal to 45.3% (53.7% a year ago).
During the period under review the securities portfolio expanded by 15%, and it primarily consists of bonds, and just more than 5.5% of it falls to Russian stocks. OFZs account for around a half of the bond portfolio, about one third falls to Russian corporate bonds, and the remainder to banks bonds and securities collateralized under repurchase transactions. The bank has been quite active on the repurchase market since mid-2017, although in the past (2015—2016) it was not in need of raising liquidity in the market.
As of the balance sheet date, the banks portfolio of inter-bank loans primarily comprised short-term inter-bank loans granted to Russian banks, with a smaller portion falling to the money deposited at the Bank of Russia. Overall, the lending institution is aggressive in offering available liquidity in the inter-bank lending market, positioning itself as a net creditor. Monthly turnover of these operations ranged from Rub 250 bln to nearly Rub 1.6 tln in 2017. In this context, funds borrowed in the inter-bank lending market are far lower.
The banks FY17 net profit totaled Rub 4.4 bln, or up 10% y-o-y. In January 2018, the bank already earned Rub 1.4 bln in net profit.
The Board of Directors: Dmitry Lebedev (chairman), Vladislav Barankov, Alexander Germanov, Mikhail Klishin, Dmitry Mansurov, Vladimir Lukin, Kirill Seleznev, and Andrei Khorobrov.
The Management Board: Mikhail Klishin (chairman), Kirill Krivoshchekov, Oleg Malinin, Yury Khlestakov, Alexander Shalenkov, Oleg Amelin, Maxim Druzhinin, and Fania Kabalina. Hide