By Oksana Kobzeva and Alexander Winning
MOSCOW (Reuters) – Four
private banks with friendly ties with the Kremlin are emerging as big
winners from Russia’s economic crisis, helping out dollar-starved
companies at a time when large state lenders are hampered by Western
sanctions.
The four, FC Otkritie <OFCB.MM>, Promsvyazbank
<PSBR.MM>, Credit Bank of Moscow <CBOM.MM> and B&N Bank
[BINBK.UL], were relatively minor players only a few years ago.
Now
they are major beneficiaries of a bank recapitalization plan and have
used central bank foreign currency refinancing tools to win business
lending to state energy firms and others needing to meet big overseas
debt repayments.
By contrast, sanctions over the Ukraine conflict
have closed international capital markets to state lenders such as
Sberbank <SBER.MM>, VTB <VTBR.MM> and Gazprombank and
private ones owned by allies of President Vladimir Putin such as Bank
Rossiya.
The state banks are also unable to use foreign currency
refinancing tools from the central bank for more than 30 days due to
risks for Western clearing banks.
“Private banks are carving
themselves out a position by increasing lending to large industrial
companies, whereas they used to have to wait in a queue behind state
banking giants,” said Chris Weafer, senior partner at Macro Advisory
consultancy.
“We are seeing the emergence of a new banking sector
post-crisis,” said Weafer, a long-serving financial analyst based in
Moscow.
Otkritie, the only of the four lenders whose stock has
been listed for some time and is liquid, has seen its shares rise 25
percent in the past year versus an 18 percent rise in the broader MICEX
index <.MCX>.
Its assets, a reflection of its loan book,
almost tripled to 2.7 trillion rubles ($ 41.3 billion) over the course
of the year leading up to the end of June, Promsvyazbank’s assets rose
by 30 percent to 1 trillion rubles, Credit Bank of Moscow’s by 60
percent to 760 billion rubles and B&N Bank’s more than doubled to
570 billion rubles, data from Fitch Ratings showed.
Promsvyazbank
said last year it had lent hundreds of millions of dollars each to oil
producer Lukoil <LKOH.MM>, energy giant Rosneft <ROSN.MM>
and potash producer Uralkali <URKA.MM> around the time of the
sanctions.
STATE-FRIENDLY
The private banks’
growth is especially striking because falling oil prices mean overall
lending is contracting as the economy shrinks at the fastest pace since
the 2008/09 global financial crisis.
“Large private banks have
been used more and more as prime channels to finance strategic sectors
as the large state banks have been sanctioned,” said Vladimir
Miklashevsky, trading strategist and economist at Danske Bank.
They
have shared in the spoils from a large-scale bank recapitalization
program costing the state over 800 billion rubles that was agreed late
last year.
Otkritie received 65 billion rubles of OFZ government
bonds in May, while Promsvyazbank got 30 billion rubles of the bonds in
August, Credit Bank of Moscow received around 20 billion rubles of them
in June and B&N Bank has been promised a further 9 billion rubles’
worth, the banks and the government have said.
Otkritie alone saw
the amount it borrowed under repurchase agreements (repos) with the
central bank jump over eightfold to 695 billion rubles over the course
of 2014, which allowed it in turn to ramp up lending to clients.
The
repos were used to help state oil major Rosneft, run by a close ally of
Putin, Igor Sechin, refinance large Western debts at the end of last
and start of this year, according to an industry source and a banking
source.
Anton Lopatin, an analyst at Fitch Ratings, said out of
the roughly $ 32 billion the central bank had lent to Russian banks via
forex repo operations, Otkritie owed about $ 18 billion.
Otkritie
declined to reveal the size or limit of its foreign-currency refinancing
operations with the central bank or comment on details of its lending
to corporates, including Rosneft. It said it was willing to lend in
foreign currency depending on its clients’ financial condition.
Promsvyazbank
and B&N Bank said they were prepared to lend in hard currency to
companies with a large share of export revenue. Credit Bank of Moscow
declined to comment.
With large debt repayments due from
September, attention is turning to how Russian firms will be able to
cope given that global capital markets remain frozen for them.
Analysts
say private banks could once again help by giving loans to those
scrambling for foreign currency. “The main criterion is that the bank
should not be under sanctions and friendly to the state,” Lopatin from
Fitch said.
CONSOLIDATORS
The new rising stars
in the banking sector differ from banks such as Bank Rossiya, which
belong to some of the oldest and closest allies of Putin, businessmen
Yuri Kovalchuk and Nikolai Shamalov. Bank Rossiya was referred to by the
United States as “the personal bank for senior officials of the Russian
Federation” when Washington imposed sanctions on Russia in 2014.
Oktritie
Holding, which controls FC Otkritie, is co-owned by several bankers and
industrial groups, all seen as loyal to the authorities but without
particularly close ties with them.
They include bankers Vadim
Belyayev and Ruben Aganbegyan, oil tycoons Leonid Fedun and businessman
Leonid Mamut. A 10 percent stake in Oktritie Holding belongs to state
bank VTB.
Promsvyazbank is majority owned by long-established
bankers and brothers Dmitry and Alexei Ananyev, known for being close to
the Russian Orthodox church.
B&N Bank is co-owned by oil
businessmen Mikhail Gutseriyev and Mikhail Shishkhanov, while
timber-to-sugar entrepreneur Roman Avdeyev is an owner of Credit Bank of
Moscow.
As private banks ramp up lending and receive government
support, they are also seeking to expand by snapping up rivals in
Russia’s overcrowded banking market.
Promsvyazbank said this month
it had agreed to buy control in Vozrozhdenie <VZRZ.MM>, B&N
Bank’s shareholders are buying control in MDM Bank, while the owner of
Credit Bank of Moscow is looking at buying into Uralsib <USBN.MM>.
The
three targets were among the biggest private banks but were weakened by
the 2008/09 financial crisis, as well as the current one.
(Editing by Dmitry Zhdannikov and Philippa Fletcher)
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