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Russian Central Bank Bails Out Otkritie Bank, Country’s Largest Private Lender

Russian Central Bank Bails Out Otkritie Bank, Country’s Largest Private Lender

It’s been a while since the world had any bank solvency concerns; in fact, ever since the thrice botched bail out of Monte Paschi and the debacle that was Banco Popular, it has been largely smooth sailing. That changed moments ago, when the Russian central bank announced on Tuesday afternoon it has bailed out Otkritie Bank, which according to Interfax, “ranks 1st among privately-owned banks and 4th by assets among banking groups in Russia.”

Otkritie Bank’s clients include (as of 2016), 29,000 corporations 163,000 SMEs and 3.4 million individuals, including high net worth individuals. The Bank has 400 offices across Russia.

From Reuters:

  • RUSSIA’S C.BANK SAYS HAS DECIDED TO BAIL OUT OTKRITIE BANK, ONE OF THE COUNTRY’S LARGEST PRIVATE LENDERS – Reuters – 10:00 AM Eastern Daylight Time Aug 29, 2017
  • RUSSIA’S C.BANK SAYS TO BECOME SHAREHOLDER IN OTKRITIE BANK
  • RUSSIA’S C.BANK SAYS WILL NOT USE BAIL IN SYSTEM
  • RUSSIA’S C.BANK SAYS OTKRITIE BUSINESSES TO CONTINUE OPERATING AS USUAL

Otkritie’s current owners include the Czech PPF Group (29.9%) owned by Petr Kellner, the Slovak businessman Roman Korbacka (20%), and the Russian ICT Group (50.1%) of which Alexander Nesis is President. Or  rather included, as following the bailout, all of their stakes will be substantially diluted if not wiped out. The bank’s current owners and executives are said to cooperate with the regulator.

As the central bank’s press release adds “the bank is a systemically important credit organization, it occupies the 8th place in terms of assets. The Bank’s infrastructure includes 22 branches and more than 400 internal structural subdivisions.”

And since we live in a world where bailouts are bullish, this happened:

  • DOLLAR BONDS OF RUSSIA’S OTKRITIE BANK RISE ACROSS THE CURVE AFTER CENTRAL BANK PLEDGES RESCUE, BOND MATURING APRIL 2019 UP 20 CENT

 

…click on the above link to read the rest of the article…

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