The lending institution was registered as Joint Stock Investment & Commercial Bank TIPCO Venture Bank in December 1992. As decided by the shareholders meeting, in 1994 the bank was renamed Joint Stock Investment Commercial Bank Novaya Moskva, and Nomos-Bank in 2007. ICT Group (Alexander Nesis is a co-owner) gathered a controlling stake in the bank in May 2006. In 2007 the banks shares were also acquired by Russia Finance Corporation B. V. from PPF Group that had already owned Home Credit Bank in Russia.
In August 2012 PPF Group, owned by Petr Kellner, pulled out of Nomos-Bank. The bulk of a 26.5% interest held by PPF Group was purchased by Otkritie Financial Corporation*. This deal worth around Rub 15 bln became an initial stage of the project to merge Nomos-Bank and Otkritie FCs banking business. Otkritie Financial Corporation consolidated 51% of Nomos-Bank voting shares in 2013. A 13.2% stake was nominally held (the shares were deposited in a program of Global Depositary Receipts, which are listed on the London Stock Exchange) held by Deutsche Bank AG, around 11.9% of the shares were controlled by ICT Group entities (through a number of Cypriot firms whose beneficiary owners included Alexei Gudaitis, Nikolai Dobrinov, Alexander Nesis, Dmitry Sokolov and Igor Finogenov). Some of Nomos-Bank shares were in crossholding and 18.6% were listed on the Moscow Exchange.
In July 2013, Otkritie Financial Corporation finalized the takeover of two regional subsidiaries, Nomos-Regiobank and Nomos-Bank-Siberia.
Otkritie Financial Corporation, an investment company, upped its equity stake in the bank to 74.9% in April 2014. The remaining shares, including those of an additional share issue (except for the shares purchased by Otkritie Financial Corporation), constituted the free float. The media wired that Otkritie Financial Corporation intends to up its holding in Nomos-Bank to 100%, and there are plans to merge Nomos-Bank and Otkritie Financial Corporations banking assets in the future. In June 2014, Nomos-Bank was renamed Financial Corporation Otkritie Bank. In autumn 2014, the lending institution changed its corporate status to a public joint stock company in accordance with legislation.
As of January 2017, Bank Otkritie FCs controlling shareholder was Otkritie Holding that directly and indirectly held 55.2% of voting shares. The lenders shares were also in free float on the Moscow Exchange. The banks largest beneficial owners were Vadim Belyaev, the founder and a key co-owner of Otkritie, and Otkritie Holding board chairman (17.98% of voting shares), Otkritie Group executives such as Ruben Aganbegyan, Dmitry Romaev, Evgeny Dankevich, and Alexei Karakhan (9.91%), Lukoil CEO Vagit Alekperov and Lukoil board member Leonid Fedun (8.91%), ICT Group representatives Alexander Nesis, Alexei Gudaitis, Nikolai Dobrinov, Igor Finogenov, Dmitry Sokolov, Igor Tsyplakov, Konstantin Yanakov (12.08%), VTB Bank (5.51%), insurance company Rosgosstrakh (3.75%, including through trust management at Upravlenie Sberezheniyami LLC), businessmen Mikhail Parinov (3.9%), and Alexander Mamut (3.68%), with minority shareholders accounting for 6.56%. In addition, some of the banks shares are held by the bank itself, including via crossholding.
Bank FC Otkritie shareholders also included institutional investors, namely management companies that managed pension reserves and pension accruals of private pension funds on trust management terms. They are private pension fund of the Power Utilities Sector (4.86%), private pension fund Lukoil-Garant (2.46%), private pension fund RGS OJSC (4.97%), and private pension fund Budushchee JSC (4.09%).
On December 22, 2014 the Bank of Russia decided to rehabilitation National Bank Trust which ranked 28th by assets nationwide. Otkritie FC Bank was appointed rehabilitator. The regulator decided to rescue National Bank Trust to taking onboard an investor after the Deposit Insurance Agency (DIA) assessed the banks capital shortage to be equal to Rub 67.8 bln. The whole rehabilitation procedure was estimated at Rub 127 bln, with Rub 99 bln to be provided by the regulator as a DIA loan to give National Bank Trust financial aid, and an additional Rub 28 bln loan to be issued to the rehabilitating bank to cover the imbalance between the banks fair asset value and obligations. Pursuant to the rehabilitation program, Otkritie FC Bank will wrap up National Bank Trusts takeover until the end of 2020.
In June 2015, Otkritie Bank wrapped up the acquisition of Petrocommerce from financial group IFD Kapital.
In April 2016, Otkritie Bank bought Rocketbank, one of the first digital banks in Russia that promotes banking services based on Otkritie Banks legal and processing support. The group also includes a similar project (Tochka) that is focused on corporate banking services via Internet technologies.
In August 2016, Otkritie FC Bank finalized legal takeover of Khanty-Mansiysk Otkritie Bank that, in turn, was founded in 2014 by folding Otkritie Bank and Novosibirsk Municipal Bank into Bank of Khanty-Mansiysk. The group earlier planned to roll out retail banking business based on Khanty-Mansiysk Otkritie Bank, but management later decided to reorganize the bank under the groups control by folding it into the parent lending institution. As a result, the Khanty-Mansiysk Otkritie Bank license was cancelled, and all the banks assets and liabilities were taken under one roof.
The media wired in December 2016 that there could be a deal to merge Otkritie FC Bank and insurer Rosgosstrakh, thereby allowing the parties to the deal to establish the biggest private financial group in Russia. As part of the deal, Danil Khachaturov, the owner of holding Rosgosstrakh, was planned to take a minority interest in Otkritie Holding, with control over Rosgosstrakhs banking (Rosgosstrakh Bank) and insurance business going to Otkritie. According to media reports, there were plans to wrap up the deal in 2017. However, these plans did not materialize.
In July 2017, the Analytical Credit Rating Agency (ACRA) assigned a national scale rating of BBB- to Otkritie FC Bank, substantiating the rating by the lending institutions poor asset quality and the parent companys adverse impact on liquidity. Against the backdrop of a negative news flow related to the revocation of a license held by major private bank Yugra, ACRAs rating downgrade and rumors about possible financial problems at Otkritie FC Bank sparked panic in the market and resulted in a sharp decline in the lending institutions retail and corporate funds held on its balance sheet. As a result, the banks high-liquidity assets slid drastically. As early as August 29, 2017 the Bank of Russia decided to take measures to strengthen Otkritie FC Banks financial stability, in which the regulator itself intended to take part as a key investor using funds from Management Company of the Banking Sector Consolidation Fund. Temporary administration, involving Bank of Russia and BSCF employees, was appointed to work at the bank.
On December 11, 2017 the Bank of Russia officially became the holder of an over 99.9% stake in Otkritie FC Bank as part of the program allowing the regulator to take part in measures to prevent the lending institutions bankruptcy.
By a Bank of Russia order, duties of temporary administration appointed to run Otkritie FC Bank, which were executed by BSCF, were terminated since December 31, 2017.
To date, the most important stages of the banks rehabilitation have been accomplished, namely capital was injected, governing bodies were formed, so the bank is now able to develop as a standalone financial institution. The bank now operates in the conditions which are unified for all market participants.
Otkritie FC Banks regional network comprises over 440 offices of diverse formats and 2,900 ATMs in 61 Russian cities. The banking groups clientele includes over 187,000 corporate customers and around 2.7 mln households, including private banking customers. Most operations are carried out in Moscow, Saint Petersburg, the Tyumen region (including the Khanty-Mansiysk Autonomous District), Ekaterinburg, and in such regions as Novosibirsk, Khabarovsk and Volgograd. The groups headcount reached 15,000.
The bank began to expand at a dynamic pace in the second half of 1998 when its president and shareholder Igor Finogenov became deputy director of state-run weapons trader Rosvooruzhenie. At that time a number of concerns operating in the military industrial complex became clients of Nomos-Bank (Otkritie FC Bank now). Currently this is a large universal commercial bank specialized in lending and providing services to big and medium-sized corporate customers from retail, machine engineering, shipbuilding, military industrial, gold mining, nuclear, financial and construction, and foreign trade industries. Otkritie FC Banks corporate customers were or are the following concerns: diamond producer Alrosa, AFK Sistema, Novolipetsk Iron & Steel Works, Evraz Group, ChTPZ Group, Kosogorsky Metallurgical Plant, Shchekinoazot Group, Ufaoil, Promyshlennaya energetika, NPF Mikran, NPO Elsib, NTP Standart Electronix, NPP BELA, Serviko Group, Mezhdunarodnye avtobusnye perevozki, Rusgrain Holding and other concerns. The bank currently serves the parent company and all entities of Lukoil Group, providing a full range of services and products.
The bank holds leadership positions on the market of structured finance, funding of gold and silver extraction and production, and also gold and silver exports and ingot sales. Bank FC Otkritie holds fairly strong positions on the market of precious metals, investment services and private banking. Since 2006 the bank has executed mortgage lending and SME lending projects.
The banks list of services and products for corporations, small and mid-sized businesses currently includes cash settlement services, remote services, payroll projects and corporate cards, investment options for available funds and liquidity management, cash collection services, foreign trade activities, investment banking services, brokerage services, business funding (loans and credit lines, overdraft, factoring, funds provided with government support), the issue of guarantees, merchant acquiring services, etc. The bank offers customers deposit accounts, debit and credit cards (Master Card, Visa and MIR), safe deposit boxes, consumer loans (cash loans, loans to payroll customers, pensioners, credit refinancing options), mortgage loans, payments and money transfers (including via Western Union and Golden Crown). Mobile and Internet banks (Rocketbank, Tochka and Otkritie Factoring) are also available for customers.
In 2017, the banks net assets contracted by 17.9% to Rub 2.3 tln by January 1, 2018. As for liabilities, the major reason for a decline in the banks grand total was an outflow of corporate funds and a decrease in inter-bank loans drawn. Funds from both sources of liabilities on average declined twofold. On the asset side, the corporate credit portfolio took the brunt, down nearly 60% y-o-y.
The banks liabilities are still well diversified in terms of sources. As of year-start 2018, slightly more than one fourth of the banks liabilities fell to inter-bank loans drawn. It should be noted that throughout 2017 the bank saw inter-bank loans, which were drawn from commercial banks, decline to nearly zero, and this was substantially offset by liquidity from the Bank of Russia (during twelve months loans granted by the regulator doubled, and as of reporting dates the loans topped Rub 1 tln during the year). At the beginning of 2018 retail deposits accounted for 17.9% of liabilities, 15.6% fell to balances held on accounts and corporate deposits of various duration, and 2.4% to issued promissory notes and bonds.
The remainder of liabilities is equity. As of the balance sheet date, the banks capital adequacy ratio was maintained at a level to comply with Bank of Russia requirements (11.9% for the № 1.0 ratio). Due to the write-off of subordinated obligations in the course of the banks rehabilitation, total subordinated loans, which were used in capital calculation, declined to nearly zero, according to an explanatory note to the banks financial statement, while subordinated loans for a total of Rub 118.2 bln were added calculate the banks capital).
Although turnover decreased, the financial institutions clientele remained quite active. As a whole, turnover of corporate accounts declined from Rub 4—6 tln to Rub 2—3 tln per month.
Also, 35% of the banks assets fall to the credit portfolio (as of year-start 2018), 29% to the securities portfolio, and 22% to inter-bank loans granted. High-liquidity assets (mainly cash in hand) account for 2.5%, with 8.8% falling to other assets and fixed capital.
In 2017, the banks credit portfolio was more than halved to Rub 800 bln by early 2018. The biggest decline in the credit portfolio was seen in corporate loans which slid by Rub 1 tln, or down 59.4%. As of the balance sheet date, corporate loans accounted for 86.6%. The corporate credit portfolio is mainly long-term (with loans repayable in more than three years), while the share of short-term (issued for up to six months) is substantial as well. Retail loans are mainly issued for 3Y+. At the beginning of 2018, overdue debt stood at 21% (6.6% at year-start 2017). With overdue debt rising, during the year the bank boosted portfolio provisions (from 8.3% to 46.6%). The credit portfolio is 71.9% collateralized, or insufficiently. In line with the banks interim RAS financial statement as of October 1, most corporate loans were granted to businesses from such sectors as securities transactions (23.4%), real estate (16.7%), other financial companies (11%), and services (9%).
Notably, bonds account for 90% of the securities portfolio, with over half falling to OFZ and government securities, and slightly less than one third to Russian corporate bonds. Turnover of repo transactions plunged conspicuously by the end of 2017, and has been under Rub 1 tln over the past few months.
The bank is very active on the inter-bank lending market. In the past few months the bank has largely been a net borrower. The bank heavily borrows from the Bank of Russia. Funds lent by the regulator in July-September 2017 rocketed from Rub 2.4 tln to Rub 7—14 tln. By the end of 2017, operations carried out with the Bank of Russia declined to insubstantial amounts, while turnover of inter-bank loans granted by commercial banks ranged from Rub 900 bln to Rub 2.2 tln.
The lending institution is still a market maker on the currency market, with conversion operations totaling Rub 12—13 tln by year-end 2017.
In line with its FY17 financial statement, the lending institution sustained a net loss of Rub 220.5 bln under RAS, while the lenders net profit totaled Rub 14.2 bln in 2016.
The Supervisory Board: Ksenia Yudaeva (chairwoman), Andrey Golikov, Mikhail Zadornov, Alexei Moiseev, Denis Morozov, Alexei Simanovsky, and Elena Titova.
The Management Board: Mikhail Zadornov (chairman), Veniamin Polyantsev, Alexander Sokolov, Sergei Rusanov, and Nadia Cherkasova.
* Financial Corporation Otkritie is a leading Russian banking group, offering services to institutional, private and corporate customers. The corporation launched operations on the financial markets in 1995 as VEO-Invest. Since 2004 its corporate name has been Otkritie Investment Group and it has been named Financial Corporation Otkritie since 2007. The corporations core areas are investment banking, asset and fund management, retail banking services and corporate lending.
The groups parent company is Otkritie Holding JSC, which comprises a number of entities from such sectors as finance and services, brokerage, investment and real estate management, and construction. Until recently, the groups banking business included Otkritie FC Bank and National Bank Trust which ended up under control of the Bank of Russia. Hide