News of the month:
– Russia’s Central Bank announced on the long-awaited sale of a 7.58 percent stake in the nation’s largest lender Sberbank in a secondary public offering, in a deal which could be worth around $5 billion. The sale of up to 1.713 billion ordinary shares will reduce the Central Bank’s holding in Sberbank to just 50 percent plus one share.
– The Russian government has been holding negotiations with Vnesheconombank over the consolidation of state-controlled Gazprom shares with an equity stake held by Vnesheconombank
Appointments of the month:
– Yuly Tai takes board seat at Home Credit Bank.
– Ilya Polyakov takes seat of deputy management board chairman at Rosbank.
– Yury Matveev appointed Investbank supervisory board chairman.
Russia’s Central Bank announced on Monday the long-awaited sale of a 7.58 percent stake in the nation’s largest lender Sberbank in a secondary public offering, in a deal which could be worth around $5 billion.
The sale of up to 1.713 billion ordinary shares will reduce the Central Bank’s holding in Sberbank to just 50 percent plus one share.
“It could be reduced to 50 percent in two ways; by a share placement or a sale. Seeing as Sberbank has enough capital to carry out its business plan, a sale remained the only option,” Central Bank Deputy CEO Sergei Shvetsov said on Monday.
Ordinary shares will make up 10-15 percent of the offering, Aton brokerage said in a note, adding “the SPO is perfectly timed and in our view the deal could be finalized within days.” Those shares will be sold on the MICEX stock exchange.
The price range for an Offer Share has been established at between 91 rubles and the market price at the time of closing of the books, Aton said. The share price will be released on Tuesday, September 18 or Wednesday September 19, a source told Prime news agency.
Market analysts estimate around 15 percent of Sberbank is currently traded abroad in the form of American Depositary Receipts (ADRs).
The Central Bank has appointed Credit Suisse, Goldman Sachs International, J.P. Morgan, Morgan Stanley and Troika Dialog as Joint Global Coordinators and joint bookrunners in connection with the global offering.
TPG Capital, a U.S. investment fund, has already submitted a bid to buy shares totaling $1 billion, a source in banking circles told RIA Novosti.
“TPG has submitted a bid worth $1 billion,” the source said.
One other investment fund has also applied to buy shares totaling $1 billion, he said.
“Sberbank reached agreement with key investors in advance. Therefore, there was no problem collecting bids,” he said.
The sight of Bank of Moscow president Mikhail Kuzovlyev, along with basketball players from Dynamo Moscow, peddling along the 12-kilometer bike path in Sokolniki Park on Thursday could have given some observers the idea that a celebrity race was in progress.
But in reality, it’s the result of a charitable investment by the bank to improve quality of life in the city and keep its customers longer.
“The body decays, but this biking infrastructure will prolong the lives of our clients, as we want them for many years,” Kuzovlyev said.
Inspired by the shared bike systems in Helsinki, London, Toronto, Stockholm, and Cyprus, the Bank of Moscow partnered with VeloRussia to set up free rental stations for use within parks across Moscow, which it unveiled in Sokolniki Park on Thursday.
A total of six rental points are located in the Gorky, Sokolniki, Filyovsky, Vorobyovy Gory and Tushino parks. A bike can be rented for an hour and a half, with a deposit of 2,000 rubles ($62). Two hundred bikes have been placed in total.
In Sokolniki Park, bike stands are in the shape of a red, capital M. “It’s indirect marketing,” said Sergei Gorbatov, President of the Association of Bike Infrastructure, as one does not notice the bank’s emblem instantly.
The Moscow City Department of Education is also planning to work with the bank to build similar bike parking near high schools to prevent individuals from chaining bikes to fences and other public property.
The parking station in Sokolniki Park cost about 100,000 rubles for 15 stands, which fit 30 bicycles.
The set-up in Sokolniki could pave the way for bike sharing projects across Russia. Sochi plans to open an electronic sharing service by April 2013. The city has partnered with the telecommunications giant MegaFon and Bank of Moscow. Eleven stations and 350 bikes are to be set up. Plans for St. Petersburg and Krasnodar are also in the works.
Moscow City Hall is also toying with the possibility of implementing a free bike sharing system where credit cards are used for the deposit. Due to tension between bikers and drivers, there are plans for approximately 70 kilometers of new lanes to be built, though there is no official confirmation. A public-private partnership with the Bank of Moscow has also been discussed, in which the infrastructure costs would be covered by the government and the operational costs by the bank.
Registration for users would be carried out online, or through subcontractors such as hotels, restaurants and movie theaters.
Three million euros would be enough to run a sharing project in a city for two years, Gorbatov said. The cost includes bike repairs, 25 fixed stations across Moscow, and 1,000 bikes. Bike lanes are excluded from the estimation.
Home Credit Bank has found a new strategic planning professional, namely, Ilya Zibarev who was previously in charge of mortgage lending at Alfa-Bank. It’s also possible that after the arrival of Ilya Zibarev Home Credit Bank could launch mortgage lending.
As several market participants told RBC daily, since early August Ilya Zibarev has been head of strategic planning and development at Home Credit Bank. He himself declined to comment on this information, but the bank’s deputy board chairman Vladimir Gasyak confirmed. Based on RBC daily information, Ilya Zibarev will participate in the elaboration of the bank’s new development strategy until 2016. A source at the bank said that a preparatory stage (the market environment and the bank’s market positions are analyzed) is in progress. After this it will be decided which areas of business the lending institution will be rolling out.
In accordance with the new strategy Home Credit Bank could take decisions to enter new segments such as mortgage lending (at the moment the bank aggressively rolls out consumer credits, cash credits and credit cards), said a source at the bank. Maybe, the experience amassed by Ilya Zibarev, who worked at a large universal bank where he also engaged in strategy development, will come in handy here, market players said.
Promsvyazbank, a Top 30 bank in Russia, applied to obtain authorization to place or to arrange the placement of up to 25% of its shares outside of the Russian Federation, Prime-TASS wired quoting the lender.
The bank submitted an application on September 3, 2012.
The bank seeks approval to get listed abroad 352 bln shares, but no more than 25% of the aggregate amount of its common shares taking into account additional shares, the issue of which was registered by the Bank of Russia on August 3, 2012.
Talking in late August of IPO plans, the lender’s first VP Alexandra Volchenko noted that the bank is exploring all opportunities to raise an additional capital, but, at the same time, it has not specified any IPO timing.
The Russian government has been holding negotiations with Vnesheconombank over the consolidation of state-controlled Gazprom shares with an equity stake held by Vnesheconombank, the corporation’s head Vladimir Dmitriev told journalists on the sidelines of the APEC’s business summit, RIA Novosti wired.
At present, Vnesheconombank owns 0.89% of the gas holding’s shares. The state directly and indirectly holds slightly over of 50% of the shares, but this figure is nominal and, in fact, the state holds no controlling stake. VEB’s equity stake will help increase the state’s interest in Gazprom to controlling.
“We’re in talks with the government over the consolidation of VEB’s interest with that of the state,” Dmitriev said. When asked how this deal could be transacted he said this particular issue is on the table.
For the record, Gazprom’s charter capital totals roughly Rub 118.36 bln and is divided in approximately 23.67 bln common shares with Rub 5.00 par value each.
Managing partner at law firm Bartolius Yuly Tai has got a seat in Home Credit Bank’s BoD, Prime-TASS reported quoting the lending institution’s data.
In addition, the shareholders reelected Jiri Smejc as board chairman, as well as Irina Kolikova and Galina Weisband.
Yuly Tai will represent in Russian courts the interests of Ingosstrakh’s minority shareholders which are controlled by PPF Investments. He was approved to chair the bank’s audit committee.
On October 1, 2012 Ilya Polyakov will be appointed deputy management board chairman at Rosbank, the lending institution said in a press release.In his new capacity he will be in charge of corporate business, will be based in Moscow under the supervision of management board chairman Vladimir Golubkov.
Michel Macagno will retain the post of head of corporate business at Rosbank under the supervision of Ilya Polyakov.
In addition, Polyakov was appointed head of customer relations and investment banking at Societe Generale Corporate & Investment Banking for Russia and the CIS.In this area of business he will report to Michel Payan, head of coverage and investment banking at Societe Generale Corporate & Investment Banking in the CEEMEA region.
Patricia Isaeva will join Rosbank’s corporate team as a senior banker on September 17, 2012.She will be responsible for Rosbank’s business expansion with large corporate customers in Russia by working in Moscow under the supervision of Ilya Polyakov.
Rosbank is a universal financial institution with a fairly well-developed branch network, and is one of the largest banks in Russia.The lender has been operating on the banking market since 1993.Rosbank specifies retail operations, services provided to corporate customers, investment banking and also private banking as its key areas of business. The lender’s shareholders are Societe Generale S. A. (82.39%), VTB Bank through Crinium Bay Holdings Ltd., VTB Capital CJSC and directly (9.95%), and also Cyprus-based Pharanco Holdings Co. Ltd. (7.03%), the beneficial owner of which is Vladimir Potanin.
As Banki.ru data show, as of August 1, 2012 the lending institution’s net assets totaled Rub 659.19 bln (No. 9 in Russia), capital (calculated in line with CBR requirements) came to Rub 69.62 bln, the credit portfolio amounted to Rub 411.63 bln and obligations to households equaled Rub 125.60 bln.
MOSCOW REGION, September 19 (Itar-Tass) — Russia’s VTB bank may sell a package of shares worth at least two billion dollars, VTB head Andrei Kostin told reporters on Wednesday.
“Of course, we’ll float. Let’s wait for the results of Sberbank’s sale and then we’ll see. There a minimal sum of two billion dollars,” Kostin said reminding that last year three billion dollars worth of shares had been floated.
In his opinion, it is premature to name the precise dates because it will require at least a month to monitor the market situation and Sberbank shares after their recent sale. “We’ve been waiting for Sberbank. It’s through, good for them; let’s see the results of floating,” Kostin added.
VTB and Sberbank, are on the list of the large companies slated for privatization to reduce the state’s stakes in their capital.
A year ago, a 10-percent stake in VTB was privatized. The Russian government was to have privatized a stake in Sberbank last year, but the favorable market situation has never developed.
Sberbank raised 5.2 billion dollars by placing its securities in Moscow and London in brisk demand by market participants. The 7.58-percent stake in Sberbank was floated in the markets of the British and Russian capitals at 93 roubles per security. It is higher than 91 roubles, the low threshold of the price corridor, but lower than the upper limit of 94.9 roubles at the Tuesday close.
The project involves the construction of 12 new stations
Vnesheconombank (VEB), one of the largest Russian banks, is considering investing more than USD$1.5 billion in the construction of a new metro line branches in the Ukrainian capital Kiev.
The project involves the construction of 12 new stations. The new line will go from the right to the left bank of the Dnieper river. The project is expected to be implemented on the principle of the concession, while among the contractors of the project is Transmashholding, Russia’s largest manufacturer of rail equipment.
Due to lack of funds the Kyiv authorities, so far, were not able to start the project, given the fact that the annual spends for the project in the city’s budget were put at the level of $100 million a year.
A new metro line (the fourth) will solve the transport problem for almost 500,000 thousand citizens of the Kiev’s Dnieper Left Bank, as well as to provide its fast transport link with the right bank. The new line will have a passenger traffic of 40.8 thousand per hour
In addition to Russian investors, there was a possibility of the pariticipation of Japanese companies, as well as group of Chinese investors, which considered the possibility of the loan in the amount of $3 billion.
The London Stock Exchange has included Sberbank’s stock in its official list, following the sell-off of a 7.58 percent stake in Russia’s largest state-controlled lender, the LSE said on Monday.
The London bourse admitted Sberbank’s Global Depositary Receipts (GDRs) and American Depositary Receipts (ADRs), each representing four ordinary shares.
Russia’s Central Bank closed a deal on September 19 to sell a 7.58 percent interest in Sberbank for 93 rubles ($3.04) per share and $12.16 per Global Depositary Receipt for $5.2 billion, while retaining a 50 percent plus one share stake in what is described as Europe’s third largest bank after HSBC and Santander.
The sale of a stake in Sberbank is part of the Russian government’s large-scale privatization plan to sell off state assets.
Ahead of the sale of the 7.6 percent stake, Sberbank launched in June 2011 its long-awaited American Depositary Receipts program and selected the Bank of New York Mellon as its depositary.
After official listing on the LSE, both Sberbank’s ADRs and GDRs are shedding about 1 percent of their value.
As of 11:33 a.m. Moscow time (07:33 GMT), Sberbank’s ADRs, which previously traded through the regulated market segment of the International Order Book (IOB), fell one 1 percent to $12.08 per security while the lender’s GDRs, which were sold in Sberbank’s second public offering (SPO), lost 1.1 percent to $12.02.
New members of the supervisory board were elected after an extraordinary shareholders meeting held by Investbank.
Yury Matveev, head of corporate operations at Investbank, has been appointed to chair the supervisory board. The supervisory board consists of nine members.
Investbank OJSC is a private bank operating a wide network, which turned federal after taking over Moscow-based Conversbank, Ekaterinburg-headquartered Grancobank and Voronezhprombank. The bank’s primary areas of business are lending and cash settlement services rendered to commercial entities, retail deposits and currency operations. The bank’s major shareholders are TradeImpex LLC (19.99%) Dent Stil LLC (19%), Company Martis LLC (17.70%), Academgroup CJSC (13%), Reha Holdings Limited (12.23%), Paritet Invest LLC (6.26%) and Investpromalliance CJSC (5.85%). The lender’s primary beneficial owners are Sergei Mastyugin, Natalia Glukhova, Elena Golub, Vitaly Goncharov, Norwegian citizen Hans Yukum Horn and Sergei Zadirko.
Based on Banki.ru data, as of September 1, 2012 the lender’s net assets equaled Rub 49.92 bln (No. 90 in Russia), capital (calculated in line with CBR requirements) totaled Rub 6.50 bln, the credit portfolio amounted to Rub 31.78 bln and obligations to households equaled Rub 36.04 bln.
President of the Association of Regional Banks of Russia and deputy head of the State Duma’s Financial Market Committee Anatoly Aksakov submitted to the State Duma a draft law limiting the full cost of credits provided to households, his press secretary told journalists.
In line with the draft law, the full cost of a credit issued to a household by a bank, a microfinance organization, a credit cooperative and other commercial lender (except for pawn shops) should not exceed the 2-fold market average cost of a credit of a relevant type. In addition, the calculation of the full cost of a credit along with interest covers all other fees, commission fees and compensation charged by a creditor and other parties under deals related to a credit.
As for loans extended by pawn shops, the draft law aims to limit the highest possible interest rate to one thirty-third of a percent per day, 10% a month and 120% a year.
It is assumed that if under an agreement entered into with an individual the full cost of a credit is higher than the 2-fold usual full cost, then under a lawsuit filed by an individual a court will be entitled to rule to lower interest on usurious transactions in accordance with the Civil Code.
If adopted, the law will become effective six months after its official publication. Its provisions will apply to agreements to be signed upon expiry of twelve months after the law takes effect.
State Duma Committee for Financial Markets Deputy Chairman Anatoly Aksakov has submitted to the Duma a bill on limiting interest rates on credit granted to individuals, the committee told journalists.
The deputy said the State Duma will begin considering a new version of the Civil Code in the second reading in the near future, which in part deals with loans granted from one individual to another.
Pursuant to the bill, the full amount of credit granted to the individual by a bank, a micro-financial organization, a credit cooperative, or other commercial creditors – excluding pawn shops, must not exceed the twofold average market cost of the corresponding credit.
At the same time, all other rewards, commissions and compensations levied by creditors and other individuals on transactions connected with the credit are included in its full cost.
It is supposed that, if pursuant to the contract concluded by the citizen the full amount of the credit exceeds the twofold average, the court will have the right to reduce the interest amount under usurious transactions in accordance with the Civil Code under the borrower’s lawsuit.
If adopted, the law will come into effect six months after its official publication. Its provisions will be applied to contracts concluded within a year after the law comes into effect.
The State Duma’s Financial Market Committee recommended that a draft law on the bankruptcy of individuals be adopted in the first reading.
The draft law “On Amending to the Federal Law “On Insolvency (Bankruptcy)” and Separate Legislative Acts of the Russian Federation as to Regulate Rehabilitation Procedures Applied to an Individual Debtor”, which was worked out by the Ministry for Economic Development, aims to enhance legislation regulating the legal status of individual debtors.
In line with the draft law, an individual in a bind will be able to file for bankruptcy and a court, if the individual has a regular source of income, could provide him/her with a respite of up to five years to clear the debt.
An individual whose debt exceeded Rub 50,000.00 and is three months overdue could be declared bankrupt.
Within five years from his/her declaration of bankrupt an individual will not be entitled to apply for a loan without specifying he/she is a bankrupt. Also, the draft law envisages to prohibit an individual from declaring bankrupt no more than once every five years.
From the time when an arbitration tribunal rules to declare an individual entrepreneur bankrupt and to initiate bankruptcy proceedings an individual’s registration as an individual entrepreneur will lose effect, and also licenses granted to him/her to carry out various entrepreneurial activities will be abolished.
Furthermore, an individual won’t be able to get registered as an individual entrepreneur until bankruptcy proceedings are complete. A debtor could be subject to administrative and criminal responsibility for the intentional or fictitious bankruptcy, and also for the presentation of unreliable information to an arbitration tribunal that hears a bankruptcy case.
If adopted, the law is expected to become effective in a year after its official publication.
At its meeting on Friday, the State Duma adopted in the second reading a bill describing currency violations in greater detail.
Earlier, the Code of Administrative Violations only loosely addressed the issue.
Practice has shown that the provisions fail to cover all possible violations, according to the notes to the draft law.
Under the new legislation, administrative fines will be imposed for the purchase and sale of foreign currency and cheques nominated in foreign currency (travel cheques inclusive) in circumvention of authorized banks, as well as for foreign currency operations performed outside authorized banks, including those located abroad, in the event that they are not provided for by Russian currency law.
Fines will also be levied on foreign currency transactions in which the settlements have been made at the expense of funds deposited in banks outside Russia.
The fine amount will range from three-fourths to the total amount of the unlawful transaction.
Individuals, officials, and legal entities will be relieved of administrative liability for breaking the procedure on the import, export and transfer of Russian currency and securities in physically certificated form.
On Monday the Moscow Commercial Court postponed a hearing for the Foreign Economic Bank’s (VEB) lawsuit against major development company Don-Stroy until November 6. VEB is seeking over $144 million in the suit/
At the previous hearing the court learned that the parties were negotiating a settlement. The developer also reported that it was changing its name to Assol. On Monday the parties said their negotiations were ongoing and thus filed a motion to postpone the hearing.
The plaintiff initially sought 4.68 billion rubles ($144 million), but on Monday a motion was filed to increase the amount due to mounting interest.
Don-Stroy’s subsidiaries Soling and Complex-Stroy are acting as co-defendants.
In December 2007, Svyaz-Bank granted Soling a $115.5 million credit line with a five-year term at an annual interest rate of 10-percent. During the financial crisis, the rate was increased on two occasions and has reached 15 percent.
Don-Stroy and Complex-Stroy were the guarantors of the loan. The claims under the credit line were assigned to VEB in 2011. VEB and Don-Stroy have each contested the terms and claims of the credit line agreement several times.
Don-Stroy Invest is one of Moscow’s largest developers. In partnership with VTB, the company implements large-scale projects. Its 2011 revenue was 10.40 billion rubles ($316.39 million) and it plans to increase this by 24 percent to 12.98 billion rubles ($394.7 million) in 2012.
On October 30 the Supreme Commercial Court will hear Alfa-Bank’s complaint against Belarus’ state-run utilities company Brestenergo to recover $18 million in debt under supervisory procedure, the court spokesperson told the Russian Legal Information Agency.
Thus the court granted Brestenergo’s request for a review of the lower court’s decision.
The Supreme Commercial Court ruled that the dispute should be reconsidered by its presidium so as to address any legal uncertainty with respect to the interest accrued in the loan’s early repayment at the request of the lender.
On January 25, the Moscow Commercial Court partially upheld 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. Brestenergo 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 as Brestenergo defaulted in servicing them. The defendant said at the hearing that it did not agree with the plaintiff’s claims, stating that the bank did not follow the required procedure, sending the company an early recovery notice, rather than a termination notice.
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 District Federal Commercial Court has validated the dismissal of the National Reserve Bank’s (NRB) defamation lawsuit against the Kommersant publishing house, a court spokesperson told the RAPSI on Wednesday.
The Moscow Commercial Court dismissed billionaire Alexander Lebedev’s lawsuit in November 2011. On Thursday, the court dismissed the bank’s appeal of the dismissal, and the judicial act came into effect.
The NRB and Lebedev had earlier filed four defamation lawsuits against Kommersant. Their actions were provoked by the paper’s allegations that the NRB was under investigation due to the embezzlement of public funds allocated for the Rosiisky Capital Bank bailout.
The lawsuit was based on a March 4 story entitled, “NRB returns profits to shareholders.”
NRB’s lawyers said the false information negatively affected the bank’s reputation and asked Kommersant to publish a retraction and pay 10 million rubles ($324,500) to the bank and 1 million rubles ($32,450) to Lebedev in compensation.
Kommersant called the claims unfounded.
Three other lawsuits provoked by Kommersant articles mentioning the criminal case were also turned down by the Moscow Commercial Court on similar grounds.
According to the NRB’s website, the National Reserve Corporation-controlled by Lebedev-holds 59.83 percent of the shares in the bank. Lebedev personally holds 4.58 percent of the shares, his son Yevgeny holds 13.79 percent, VEB Capital Chief Yury Kudimov holds 18.38 percent, and the remaining 2.74 percent belong to the Federal Agency for State Property Management.
The Moscow Commercial Court upheld on Monday Nordea Bank’s claim against the SU-155 construction company for $24.8 million in debt under a loan agreement, the court told the Russian Legal Information Agency (RAPSI/rapsinews.com).
The initial claim amounted to 719.375 million rubles ($23 million), but was later increased to 773.8 million rubles ($24.8 million). SU-155 intends to challenge the award.
In August 2011, the bank filed two claims – one for $31 million and the other for $23 million, seeking early repayment under the loans issued in 2007 and 2008. The loans were taken to refinance the company’s working capital, but the bank held that the company defaulted on its debt servicing in May 2011. SU-155 argued that it had overpaid the interest by $1.3 million.
The court ordered the defendant to repay $31.364 million in the first claim. The judgment has entered into force.
SU-155 has been operating on the Russian construction market for over 50 years. It comprises more than 150 independent organizations, including 28 industrial enterprises in 17 cities.
Nordea Bank is a top-30 Russian bank offering banking services to individuals and entities. The Scandinavian Nordea group owns a 100 percent stake in the bank.
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