CONTENTS OF JULY 2012 ISSUE
President Vladimir Putin has signed Russia’s accession to the World Trade Organization into law, completing an 18-year campaign to join the trade rules club, the Kremlin press office said Saturday.
Russia’s upper house of parliament ratified the country’s WTO entry earlier this month. The $1.9 trillion Russian economy, the world’s ninth-largest, will become the WTO’s 156th member in 30 days after ratification.
Russian State Duma intends to approach the Russian Banks’ Association with a request to announce a standstill agreement on private loans in Krymsk for the recent flood sufferers. The lawmakers say other financial institution should follow Sberbank’s example. The standstill agreement should also involve small business, the lawmakers say.
This suggestion was announced by Andrey Vorobiev, deputy chairman of the State Duma of the Federal Assembly of the Russian Federation, with chairman of State Duma Sergey Naryshkin to support this suggestion.
It was reported that the leading banking institution of Russia, Sberbank, has already started to sustain claims from private borrowers to refinance their loans. The bank is considering standstill agreements for a year ahead with a possibility of refinancing them.
On July 1, 2012 the Central Bank of Russia launched the registration of payment systems under the regulations provided for in the Federal Law “On the National Payment System (NPS)”. Based on the regulator’s estimates, 50—70 institutions may register as payment systems.
The law determines that NPS is an aggregate of money transfer operators (including digital money operators), banking payment agents, payment agents, federal postal services divisions, operators of payment systems and payment infrastructure.
A payment system is an aggregate of institutions dealing under the regulations of a payment system in order to wire funds, which includes a payment system operator, operators of payment infrastructure services and payment system participants, of which at least three institutions are money transfer operators.
The Bank of Russia, which regulates the payment systems market, marks notions of a system and socially significant payment system.
A system significant payment system is a payment system where the aggregate amount of money transfers totals Rub 240 bln within three calendar months in a row. In addition, separate money transfers exceed Rub 100 mln.
To be placed on the list of socially significant payment systems a payment system should meet at least one of the above criteria. The first one is that the aggregate amount of money transfers within a system in the course of three consecutive calendar months should equal Rub 12 bln, and half or more of separate money transfers should be equal to Rub 100,000.
Other reasons to classify payment systems as socially significant are the number of money transfers using payment cards within a calendar year (100 mln transfers), the number of account-free money transfers within a calendar year (2 mln transfers) and also the number of money transfers by individuals under their bank accounts within a calendar year (2 mln transfers).
The board of directors at the Bank of Moscow (VTB Group) decided to discontinue participation in its subsidiary bank, Mosvodokanalbank (a Top 600 bank by assets), the Bank of Moscow said in a press release.
Mosvodokanalbank is one of the Bank of Moscow’s two subsidiaries in Russia. Apart from this lender, the Bank of Moscow controls Russian National Commercial Bank.
Initially the Bank of Moscow intends to boost its equity stake in Mosvodokanalbank from the current 65.9% to 92.7% and later to pull out of the lending institution.
“The pullout from Mosvodokanalbank is driven by the implementation of the Bank of Moscow’s strategy. The stake will be raised by buying the current shareholders’ holdings. The shares will be sold on the market, to a group of interested investors,” the lending institution’s press service told Prime-TASS.
Transport operator Lyublino currently owns 25% of Mosvodokanalbank, a 4.08% stake is held by Industrial Construction Company PIKS, Production Construction Firm KOPR’s holding equals 2.61% and Mosgorgidrostroy’s stake is equal to 1.87%.
Promsvyazbank’s vice president and managing director for finance Vladislav Khokhlov has been appointed chief financial officer.
“Khokhlov is responsible for the issues related to Promsvyazbank’s financial activities and oversees the following areas: treasury, the financial department, the preparation of RAS and IFRS statements, and reports to fiscal bodies,” the lending institution said in a press release.
Promsvyazbank is a large universal bank operating a wide network of sales offices. The bank’s business focus is lending and maintaining accounts of corporate customers. Also (since 2005) the bank has been rolling out retail business. In addition, the lending institution’s business interests include operations on the inter-bank, currency and securities markets. Promsvyazbank’s beneficial owners are brothers Alexey and Dmitry Ananievs who control on an equal basis 88.254% of the bank via Promsvyaz Capital B. V. Another 11.746% stake is held by the European Bank for Reconstruction and Development (EBRD).
As Banki.ru data show, as of June 1, 2012 the bank’s net assets totaled Rub 602.73 bln (No. 11 in Russia), capital (calculated in line with CBR requirements) amounted to Rub 63
.94 bln, the credit portfolio came to Rub 399.65 bln and obligations to households equaled Rub 136.24 bln. 04.07.2012
State-run corporation Vnesheconombank has acquired a 27.6% stake in Lider Management Company, Prime-TASS wired quoting VEB as saying.
VEB, along with Gazprom, was going to buy some of the management company’s additional shares. Insurer Sogaz, Lider’s major shareholder, had no plans to buy the additional shares.
Lider Management Company’s report on the additional share issue was registered on May 2, Vnesheconombank said in a press release. The additional share issue’s amount remains unknown.
Lider Management Company is the largest asset management firm in the Russian Federation. As of March 30, 2012 the management company ran assets worth Rub 399.1 bln.
The board of directors at Transcreditbank, which is part of VTB Group, also elected VTB 24 CEO Mikhail Zadornov as its board chairman, Transcreditbank said in a press release, Prime-TASS reported.
In June the lending institution’s shareholders meeting approved a new board. Of the current board members the seats were occupied by Mikhail Zadornov, VTB 24 Bank deputy management board chairwoman Ekaterina Petelina, VTB Bank first deputy management board chairman Yury Soloviev, VTB Bank deputy management board chairman Herbert Moos, ZHASO general director Tatiana Paramonova, deputy head of corporate finance at Russian Railways Pavel Ilyichev and Transcreditbank first VP Dmitry Olyunin.
The bank’s new board members are also Transcreditbank president Alexey Krokhin and Alexander Zelenov, head of the financial institutions department at Vnesheconombank.
Yury Novozhilov, former Transcreditbank CEO and now NPF Blagosostoyanie executive director, and VTB Bank senior president Stanislav Belov left the board.
Intesa Sanpaolo, Italy’s second largest lender by assets, has partnered with Russian banking giant Gazprombank for a private equity joint venture to help Russian and Italian medium-sized companies to expand internationally.
The 50-50 joint venture between the two banks will provide for a commitment of up to €300m for equity investments into medium-sized companies.
Its goal is to bring its portfolio companies to an international level and this concerns Italian companies who plan to expand into Russia, as well as the Russian companies with an interest in developing in Italy and Europe.
The agreement was signed today in the presence of the Russian Prime Minister Dmitry Medvedev and the Italian Prime Minister Mario Monti, by Intesa Sanpaolo’s CEO Enrico Cucchiani and by Gazprombank’s deputy chairman of the board, Victor Komanov.
“We believe that the development of Russian-Italian economic cooperation, including reciprocal exchange in technologies, resources and market channels, may be exceptionally useful for a great many enterprises in both countries,” said Komanov. A spokesperson for Intesa Sanpaolo declined to give further details on the joint venture.
The European Bank for Reconstruction and Development is making its first investment in the renewable energy sector in Georgia with a loan to finance the construction of a hydropower plant in the south west of the country.
The EBRD and the International Finance Corporation (IFC), a member of the World Bank Group, are providing a US$115.5 million credit to Georgia-Urban Energy to co-finance the construction and operation of its 87-MW Paravani hydropower plant, news agencies reported.
Georgia-Urban Energy is the Georgian subsidiary of the Turkish group Anadolu Endustri Holding.
The EBRD will provide US$52 million of the total financing, with US$40.5 million coming from the IFC and a further US$23 million syndicated via commercial banks. As part of the project financing, the EBRD will also take US$5 million equity in Georgian-Urban Energy, reports indicate.
Recently, JSC Energo-Pro Georgia announced it is planning a US$493 million project to build two hydropower plants and a power cable to connect Georgia and Turkey.
JSC Energo-Pro Georgia is a unit of Czech Republic-based Energo-Pro AS.
National Payments Council of Russia is going to provide Russian lenders with a set of guidelines for actions in case of cyber fraud, Lev Shumsky, head of information security of asset protection department of Svyaznoy Bank, said during a round table on remote services security.
Those guidelines will help lenders to co-operate more effectively, and for those bank clients who suffered from cyber fraud this means a possibility of compensating their financial losses more briefly, Shumsky said. ’Those recommendations include over ten different statement forms to be sent to law enforcement bodies for those who suffered from cyber fraudsters’, he added.
The guidelines aim mainly to boost efficiency of co-operation among lenders to avert malefactors from illegally cashing clients’ money.
The Ministry for Economic Development finds preferable the sale of CBR’s equity interest in Sberbank than an additional share issue, the sale could be transacted until the end of the year, Minister for Economic Development Andrey Belousov noted, RIA Novosti reported.
The media previously wired that the government is pondering over releasing state-run banks into private hands via additional share issues, which would allow banks to boost their capitals to preserve stability during a crisis. Meanwhile, first deputy CBR chairman Alexey Ulyukaev did not rule out an additional share issue at the largest Russian bank, Sberbank, instead of the sale of some CBR-held shares. A 7.58% stake in Sberbank is scheduled for the privatization this year.
“I guess it’s more preferable to talk about the sale rather than about the additional share issue,” Belousov told journalists when asked about the form of privatizing CBR’s stake in Sberbank.
Talking about the timeframe of the sale, Belousov pointed out that “it’s clear when it comes to the deadline, I think there is every chance, if market conditions allow, so far it has been such that everything will take place this year”. 30.07.2012
At its plenary session on Friday the State Duma adopted in the third reading the government’s law aimed at improving the bankruptcy procedure and imposing heavier liability on senior executives and owners of banks for losses inflicted.
The document stipulates that a lending institution’s founders (participants) who decided to wind up the bank are to appoint a liquidation committee (receiver), approve a lending institution’s interim liquidation balance sheet and liquidation balance sheet as agreed upon with the Bank of Russia.
The amendments also aim to impose on the Deposit Insurance Agency (DIA) duties and authority to detect actions taken by management or supervisory bodies of banks, because of which a bank suffered losses.
The draw law settled a mechanism to challenge transactions executed by a bank or other parties at the expense of the bank ahead of bankruptcy. DIA will have the possibility, when rehabilitating a bank, to find out reasons behind the bank’s financial difficulties and take actions to recover losses inflicted to the bank, its creditors and shareholders from guilty parties.
The document supplements bankruptcy legislation with an article, according to which property (securities and cash), accepted and bought by a lending institution under agreements on securities operations, if a bank’s license is revoked, is to be returned to customers at the stage when temporary administration is introduced. At the same time, the draft law establishes how to return funds held on trust management terms at a lending institution.
Furthermore, legislation on bank bankruptcy is to be supplemented with an article specifying mechanisms for a receiver to distribute property available between founders (participants), the manner and conditions of assignment of property to local self-government bodies and the manner to write down property.
The document also aims to make amendments to the law on banks and banking activities which suggest that information on the activities of lending institutions, their property and liabilities should be stored on digital storage devices.
The Russian government submitted to the State Duma a draft law prohibiting foreign banks to open branches in Russia.
The draft law “On Making Amendments to Separate Legislative Acts of Russia” was compiled as part of the Russian banking sector’s development strategy for the period until 2015 and confirms the arrangements made by Russian negotiators in the course of consultations over Russia’s admission to the WTO.
The draft law proposes excluding branches from the definition of the Russian banking system as a whole. Also words “branches of foreign banks” are to be excluded from articles about the state registration of lending institutions with foreign investment and additional requirements for their establishment and activities.
The effective laws provide for setting restrictions on the participation of foreign capital in the Russian banking system that are imposed at the proposal of the Russian government that is agreed upon with the Bank of Russia.
In accordance with the effective legislation, subsidiary banks, branches and representative offices of foreign banks can operate in Russian territory. Meanwhile, it is stipulated that branches of lending institutions with foreign investment in Russian territory are registered by the Bank of Russia in the manner it defines. As deputy CBR chairman Mikhail Sukhov previously noted, the ban on branches is presently in force as there is no CBR-established manner, in which they should be registered. This situation, as he thinks, should be fixed via a law.
At present, no branches of foreign banks are registered in Russia. Foreign capital in the Russian banking sector is represented through subsidiary banks which are registered under Russian law.
An explanatory note to the document notes that the manner, in which branches operate, differs from that of subsidiaries of foreign banks as a foreign bank’s branch does not fall within Russian jurisdiction.
Thus, branches of foreign banks are not under full supervision of regulatory authorities, are not required to meet ratios related to allocations to mandatory reserve funds, to report to the Bank of Russia under two accounting systems (Russian and international), and also to present financial statements to the Bank of Russia on a monthly basis.
The draft law’s authors point out that these operation-related privileges for foreign banks’ branches may impair the competitive ability of Russian banks.
|29.06.2012||А40-89848/12||Sberbank||Nastyusha grain company||Bankruptcy|
|16.05.2012||А40-69400/12||AMT Bank||Logopark Tatishchevo||Civil|
|29.03.2012||А40-48020/2012||Investbank||Air Baltic Corporation||Civil|
The Moscow Commercial Court has registered an application by Sberbank seeking to recognize the bankruptcy of the Nastyusha grain company, a parent company of Russias eponymous major holding, the court told the Russian Legal Information Agency on Monday.
The date to hear the validity of the application has yet to be set. At the same time, Sberbank also filed bankruptcy applications in regard to two other enterprises from the Nastyusha group. Court proceedings into these applications have not yet begun.
The courts are also considering a number of lawsuits in connection with debt recovery from Nastyusha companies. However, according to Nastyusha representatives, at the beginning of this year the group agreed on the restructuring of its debts with most banks / creditors.
In July 2010, several small companies and Nastyushas contractors, filed six applications with the Moscow Commercial Court for the insolvency of its parental company, but no bankruptcy procedures have so far been initiated in this regard.
Nastyusha was founded in 1992. It includes enterprises engaged in grain production, storage and processing, as well as bread and pastry production.
The Moscow District Federal Commercial Court held for Alfa-Bank in its lawsuit to recover $18 million in credit arrears from Belarus’ Brestenergo utility company, the court told the Russian Legal Information Agency on Wednesday.
On January 25, the Moscow Commercial Court partially satisfied Alfa-Bank’s lawsuit against Brestenergo and awarded the bank $15.61 million in principal debt, $2.4 million in interest and $500,000 in penalties. The company challenged the decision.
Initially, the bank claimed $21.387 million, but the company partially repaid its debt.
The appeals court upheld the commercial court’s judgment.
The bank sought an early repayment of two loans granted in spring 2010 because Brestenergo defaulted in servicing them. The defendant said at the hearing that it does not agree with the plaintiff’s claims, stating that the bank did not follow the necessary procedure, as it sent the company an early recovery and not a termination notice.
Belarus faced severe economic strife last year. Its financial system was shaken by a currency deficit and high inflation caused by the Belarusian ruble’s sharp devaluation.
Established in 1990, Alfa-Bank is Russia’s largest bank in terms of assets, own capital and client accounts. Its primary shareholder is AB Holding (99.89 percent), which is owned by the ABH Holding Corporation, a part of the Alfa Group.
Brestenergo was established in May 1954. It operates power plants and generates, transmits and distributes electric and thermal power.
The Moscow Commercial Court will hear on September 3 AMT Bank’s two lawsuits to recover $46 million from Logopark Tatishchevo, the court told the Russian Legal Information Agency on Friday.
In one lawsuit, the bank seeks 1.4 billion rubles ($43 million) in debt under a loan agreement made in November 2008.
In the second, it seeks 68 million rubles ($2 million) plus interest. The court has accepted the bank’s request on Friday to step up the claims amount, although it is still unclear by how much.
AMT Bank (previously known as BTA Bank) is a multipurpose financial institution with nine branches and 26 offices.
According to the RIA Analytics Economic Research Center, AMT ranked seventy-first in Russia in terms of assets as of April 1, 2011.
A network of logistics centers are presently being built under the Eurasia Logistic project, including Logopark Tatishchevo.
Eurasia Logistic is owned by Kazakh businessman Mukhtar Ablyazov. The project works to develop industrial facilities in the former Soviet Union, is part of the Eurasia investment and industrial group and has been implementing Class A industrial complex projects since 2005.
On Tuesday, the Moscow Commercial Court postponed until August 15 its hearings of two Investbank lawsuits against Latvian national air carrier Air Baltic Corporation (airBaltic) and Baltijas Aviacijas Sistemas (BAS) to recover a total of 13.5 million euros, the court told the Russian Legal Information Agency.
On the same day, the plaintiff increased the amount it is claiming as the period of accrued interest had extended. In one lawsuit, the bank now seeks 2.35 million euros (instead of 2.2 million) and in the second – 11.15 million euros (instead of 10.3 million).
In summer 2011 the bank signed agreements with BAS for 2.1 million euro and 9.9 million euro loans, said the plaintiff. The first loan was set to mature on July 4, the second – on June 29. AirBaltic was the guarantor. The BAS agreed to pay monthly interest, but as the company stopped payment in November 2011, the bank went to court seeking early repayment.
On Tuesday, the court also upheld Latvijas Krajbanka’s application to step in as the third party. Latvijas Krajbanka is currently undergoing bankruptcy procedures.
Investbank was set up in Kaliningrad in 1989. Its head office moved to Moscow in 2011. Investbank is a multi-service bank which serves over 20,000 companies and 200,000 individuals in 84 Russian cities.
Air Baltic Corporation is a joint stock company founded in 1995. The Latvian government holds 99.8 percent of its shares. In 2011, AirBaltic served over 3.3 million passengers. Its fleet consists of 34 planes.
Date: 27-28 August, 2012 | Venue: Sheraton Roma Hotel, Rome, Italy
Registration Deadline: 15 August 2012
Email to: email@example.com
Research papers in all areas of Accounting, Banking, Economics, Finance, Investment, Management, Marketing & Business Education are invited for this international conference sponsored by six Cabell Listed Journals.
Organized by: European Centre for Business and Economic Research (ECBER), WBI London BCA Aust ( USA), and World Business Institute, Australia