Russia’s URALSIB bank posted a R11.2 billion ($400 million) net profit in 2005 to IAS. LUKOIL shares, or rather their upward re-evaluation, accounted for the lion’s share (over R10.8b) of incomes. Over the past year the LUKOIL share portfolio held by URALSIB appreciated by approximately 104%. Borrowed funds and their subsequent placement brought URALSIB R8.7b; commissions and other services brought another R2.8b. Nearly the entire income went to salaries and other administrative expenditures, which totalled R10.7b. URALSIB’s dependence on LUKOIL stock is a serious risk, FITCH RATINGS analysts believe. Over the past few years URALSIB made a series of acquisitions in different financial sectors, including several major banks, such as URALSIB and AVTOBANK. They merged last year, making URALSIB the second largest private bank in Russia. ALFA BANK is the largest private bank in Russia. By January 1, 2006, integrated URALSIB had about R240b in assets.
Source: VEDOMOSTI, June 21, 2006
