September Background screening and Investigations in Russia

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September Background screening and Investigations in Russia Powered By Docstoc
					Saint-Petersburg, Russia                              Hungary, Budapest


                           ISSUE #5, SEPTEMBER 2011
      Saint-Petersburg, Russia                                                                         Hungary, Budapest


 In q3 of 2011 the banks expect a seasonal decline in loan demand
In III quarter of 2011 the banks expect a seasonal decline in demand of loans from borrowers, but banks are not going to attract
clients with the liberation of lending programs as usual, - the Bank of Russia stated, after an “Overview of changes in the terms
of bank credit in the II quarter of 2011” was published. The credit easing as a measure against financial market’s instability is
improbable until the end of the year. The significant growth in loan portfolio is planned by neither the banks nor the regulator.

 The largest Russian banks top-five will accumulate more than 50% of banking sector assets
The largest Russian banks top-five will accumulate more than 50% of banking sector assets. This was declared by Michael
Sukhov, the director of licensing and financial rehabilitation of credit institutions department of Central Bank of Russia, on the
International Banking Forum. He said that the share of a “big five” in Russian banking system assets exceeds 49% at the
moment. Sukhov also noticed that such level of concentration of banking activity is not critical according to international
standards. Illustrating the consolidation process in Russian banking sector, Sukhov reported that during this year nine banks
have already merged with another credit institutions. In September this process will be completed by three more banks. The
total amount of mergers can reach 20 at the end of the year, which fits the 2010 year-dynamic.

 Pavel Gurin, the chairman of Raiffeisenbank, died on September 5, 2011
Gurin joined Raiffeisenbank in 1999. He later founded the direction of corporate
finance and banking investment operations. In 2003 he was appointed as a
board member, head of corporate finance and banking investment operations.
In 2006 he became deputy chairman of the board, the head of the directorate of
servicing and financing of corporate clients of Raiffeisenbank. September 30,
2008 Pavel Gurin officially took over as chairman of the Joint-Stock Company
The Supervisory Board of the bank will decide on who will substitute Gurin as
soon as possible - the report says.
      Saint-Petersburg, Russia                                                                          Hungary, Budapest

 The owner of Binbank Michael Shishkhanov IS buying “Inteko”

                                 The owner of Binbank Michael Shishkhanov in
                                 partnership with “Sberbank Investments” (the
                                 subsidiary of Sberbank of Russia) are buying Elena
                                 Baturina’s “Inteko” CJSC. The parties have already
                                 signed the irrevocable offer for buying 100% of
                                 “Inteko” CJSC, “Patriot” CJSC and all the industrial and
                                 project structures belonging to them. The parties are
                                 going to finalize the deal till the end of the month.
                                 Experts who took part in preparation of the
                                 transaction, estimate the market price of “Inteko”,
                                 “Patriot”, all the structures in their property and the
                                 projects to be nearly 1,2 bln dollars. The financial
                                 trems of the deal are not unfolded.

 Corporate governance committee of VTB Supervisory Board approves strategy to integrate
VTB Bank’s supervisory board committee for the strategy and corporate governance held a meeting on September 2 and
reviewed a number of important issues related to Transcreditbank’s integration into VTB Group and corporate governance at
VTB Bank, in particular the introduction of a corporate secretary. As VTB Bank noted in a statement, at the end of the meeting
the committee decided to approve the strategy for integrating Transcreditbank into VTB Group for 2011—2013, recommended
that the supervisory board approve a statute on the corporate secretary and elect a candidature nominated by VTB Bank to this
position. The committee also backed the initiative of VTB Bank management for the supervisory board to assess in October-
December 2011 the corporate governance practice and approved the assessment methodology proposed that was compiled in
accordance with CBR recommendations.
“The meeting settled a number of strategic issues related to VTB Group’s development that contribute to enhancing its
operating efficiency. I am confident that the introduction of the corporate secretary, and also the participation of supervisory
board members in the assessment of the corporate governance system will allow us to comply with the best international
practice in this area. In turn, Transcreditbank’s strategy elaborated that provides for Transcreditbank’s full integration into VTB
Group until the end of 2013 will contribute to solidifying the group’s market positions," VTB Bank management board member
and head of the bank’s strategy and corporate governance department Ekaterina Petelina commented on the meeting’s results.
      Saint-Petersburg, Russia                                                                         Hungary, Budapest

 Rosselkhozbank buys ”Gazgarant” insurance company and thus enters the insurance market
                         Rosselkhozbank bought “Gazgarant” insurance company – informs “Prime” with reference to the
                         bank’s materials.
                         “Gazgarant” is a part of “Sogaz” insurance group, almost 100% of its assets belonged to “Sogaz” OJSC.
                         The nominal capital of “Gazgarant” is 31,7 mln rub. It should be increased to120 mln rub till the end
                         of 2011 because of the new requirements for the minimal volume of the nominal capital.
                         The bank was thinking of entering the insurance market by creating its own insurance company or
                         buying the functioning one. Due to some difficulties with insurance company registration, the second
                         variant was chosen.
Irina Zhachkina, former Advisor to Chairman of the Board of of Rosselkhozbank, was appointed the General Director of the

 The Accounts Chamber of RF is planning to lower the amount of inspections in the banking sector
The Accounts Chamber of Russian Federation is planning to lower the amount of inspections in the banking sector, - Valeriy
Goreglyad, the vice-head of department. “It is unprejudiced, but with decreasing of the government support, the controller
(CBR) should take control in its hands”, - Goreglyad said.
He explained that the Accounts Chamber activity in banking sector was connected with the crisis. “The activity was caused by
the crisis when large federal resources entered the banking system, and we had to react. But we are for CBR in general,” – said
Goreglyad and added that they are not going to deprive CBR of its control functions.
He mentioned particularly that the Accounts Chamber is not going to check the Bank of Moscow sub-companies and reminded
that the check of the Bank of Moscow started because of the connection with VTB.
The planned inspections of VTB, VEB, Sberbank still remain in effect, for example, the check of Rosselkhozbank will be held soon.

 Sberbank agrees to buy 100% of Volksbank international for €585—645 mln
Sberbank of Russia has signed an agreement on the acquisition of a 100% equity stake in the East European division of the
Austrian banking group Oesterreichische Volksbanken AG (OVAG), Volksbank International (VBI), OVAG said in a statement on
the Prague Stock Exchange.
Sberbank will buy VBI, except for the Romanian division, for €585 mln to €645 mln. The transaction will depend on VBI’s FY11
financial showings.
If the deal is closed successfully, this will be the first acquisition of Sberbank beyond the FSU. The Russian largest lender
operates subsidiaries in Belarus, Kazakhstan and Ukraine. VBI’s network spans nine countries of Central and Eastern Europe.
Volksbank International is controlled by OVAG (51%). Moreover, its shareholders are German lenders DZ Bank and WGZ Bank
that hold 24.5%. A 24.5% equity holding is also in the hands of France’s Banque Populaire Caisse d’Epargne.
      Saint-Petersburg, Russia                                                                         Hungary, Budapest

 Russ-bank renamed Rosgosstrakh bank

Russ-Bank announces the change of its official corporate name to Rosgosstrakh Bank (OJSC). On September 6, 2011 the bank
received the registered edition of its charter and a general license for the conduct of banking operations with the indication of
the new corporate name.
“The renaming procedure will not entail any changes in the lending institution’s rights or obligations to its customers," the bank
said in a press release.
As part of the rebranding campaign the plan is to change the visual image of the bank’s offices, its corporate style, presentation
materials and the web site. The bank’s new logo is the heading “Rosgosstrakh Bank” written with the company typeface in
vinous colors with a golden plus in the center.
The replacement of outdoor signs at the bank’s divisions will begin this autumn all across Russia and is planned to be complete
by the end of the year. An image-related advertising campaign will start in October and a new web site will be launched. Since
November 2011 the bank’s new logo will appear on plastic cards (cards with the previous logo will remain valid until expiration
regardless of the logo showed on them). The entire range of work to be performed as part of the rebranding campaign is
planned to be finished until the beginning of 2012

 Kudrin: The probability of the second wave of the world crisis has increased
The the second wave of the World economic crisis became more probable in comparison with the beginning of Summer-2011,
the Head of the Ministry of Finance Alexey Kudrin considers.
“Today the situation became somewhat worse. I think the percentage of probability of crisis reoccurrence is rather high”, - said
Kudrin on the Conference devoted to the 20-th anniversary of the economic reforms in Russia.
The Head of the Ministry of Finance clarified that in June, during the St-Petersburg Economical Forum, he discussed this
problems with his colleagues and estimated the 25% probability of the second wave. He also said that the Europe has serious
problems, so the European Union should consolidate to save its countries, and the USA hasn’t changed its economic model, so
the situation “looks like a patient on a drip”.
Kudrin thinks that if the European Union does not help particular countries to solve their problems, we will face the next
profound crisis.
       Saint-Petersburg, Russia                                                                           Hungary, Budapest

 CBR has published the lineup of the regulator’s Board of Director, Simanovsky became the Vice-
 CBR has published the lineup of the regulator’s Board of Directors, Alexey
Simanovsky, the former Head manager of the Department of Banking Regulation and
Oversight, became the Vice-Chairman. The previous Vice-Chairman, Gennadiy
Melikjan, resigned on September, 9th.
Now Simanovsky is not a first Vice-Chairman, but just a Vice-Chairman, so the post
for the first Vice-Chairman is still vacant. Simanovsky will be a free Vice-Chairman
and will not be a head of the Department of Banking Regulation and Supervision
According to the representative of CBR, there are two candidates for the post of the
Director of the Department of Banking Regulation and Oversight, but their names are
not announced.

 VEB to invest about 90 billion rubles in Olympic projects
The volume of Vnesheconombank’s investments in projects associated with the preparation of the 2014 Olympics in Sochi, is
around 90 billion rubles, the head of state corporation Vladimir Dmitriev reported.

"Our activity in the Krasnodar Region is primarily concerned with the implementation of preparation programs for the 2014
Olympics. The total volume of projects financed by the VEB is about 150 billion rubles, with our share of about 90 billion rubles.
This includes infrastructure in Sochi, power plants, hotels, and the Olympic Village, a ski cluster - ski-jumps and so forth, "- said
Dmitriev in an interview to "Russia 24 " TV channel.

 Unicredit bank buys bank Sibir
UniCredit Bank announced it has closed the acquisition of a 100% common stake in Bank Sibir from ATFBank, UniCredit Bank
said in a statement. The deal is carried out to streamline the management of UniCredit’s Russian assets, explains the lending
UniCredit Bank is the largest foreign bank in Russia. In 1989—2007 the bank operated as
International Moscow Bank (IMB). Since 2005 the bank has been part of European banking
group UniCredit Group and has been UniCredit Bank since December 2007. As
data show, as of August 1, 2011 the lending institution’s net assets stood at Rub 743.55
bln (No. 8 in Russia), capital (calculated in line with CBR requirements) came to Rub 78.45
bln, the credit portfolio totaled Rub 413.25 bln and obligations to households equaled Rub
43 bln.
Bank Sibir was registered in 1989. In November 2005 ATF Bank (Kazakhstan) became the bank’s sole shareholder. In mid-2007
ATFBank was purchased by European banking group UniCredit. Bank Sibir focuses to a large extent on lending individuals and
       Saint-Petersburg, Russia                                                                       Hungary, Budapest
businesses, and also private deposits. Main sources of Bank Sibir’s funding are own funds and credits granted by the parent
company. As data show, as of August 1, 2011 the lending institution’s net assets totaled Rub 2.08 bln (No. 533 in
Russia), capital (calculated in line with CBR requirements) came to Rub 880 mln, the credit portfolio totaled Rub 1.51 bln and
obligations to households equaled Rub 520 mln.

 CBR registers bank for assistance to small businesses
The Central Bank of Russia has registered a new lending institution, Bank for Assistance to Small Businesses.
A closed joint stock company, Bank for Assistance of Small Businesses, was added to the State Registration Book under entry
#3504 and its Main State Registration Number is 1117800013286. The lender’s stated charter capital is Rub 200 mln. The bank
will receive a license after its charter capital is paid and the statutory deadline for the payment has not ended yet. The lending
institution’s legal and real addresses are as follows: 4A, Robespierre Embankment, Saint Petersburg, 191015.

 Raiffeisenbank is suspected of white-washing
The financial supervisory authorities of Germany and Austria decided to look closer at Raiffeisenbanks activity in Reutte, Austria.
The bank is suspected of white-washing and aiding in tax avoidance. Raiffeisenbanks sub-company, Bankhaus Jungholz, aroused
a particular interest. Jungholz commune, where the Bankhaus Jungholz is situated, is the enclave of Austria at the German
territory, which is the part of Reutte-district of federal Austrian Tirol land. The German customs regulations are in effect there.
The designated representative of Raiffeisenbank confirmed that the investigation was carried out by the financial supervisory
authorities. According to him, the matter for it was a claim of some former employee who resigned in 2010. The representative
also said that Raiffeisenbank executive group helps the investigators and hopes that all the charges will turn out to be baseless.
And the German financial supervisory authoritiy BaFin wants to check Raiffeisenbanks sub-company situated in Stuttgart. In
2010 a small Tirol Raiffeisenbank Reutte with 700 mln Euro capital bought Bauer private bank, the former property of
Hypothekenbank. The aim of a purchase was a business expansion in Germany. The German regulator suspects the deal to have
made not in an honest way. At the time the official representatives of BaFin denied to give comments on the situation.

 President of Russia Dmitry Medvedev approved the candidature of Vladislav Contorovich as a member of
 Board of Directors of CBR
President of Russia Dmitry Medvedev approved the candidature of Vladislav Contorovich as a member of CBR’s Board of
Directors. Contorovich is a Head of the Interregional center of informatization of CBR. After the reconciliation of his candidature
he will take up a post of the first Vice-Chairman of CBR.
According to the procedure, after the president approves the candidate, State Duma’s approval is needed as well. According to
PRIME-Tass, Contorovich will supervise the affairs of IT and payment systems. Contorovich came to CBR together with the
Chairman of Bank of Russia Sergey Ignatiev, and at first was his councilor, then headed the Interregional center of
   Saint-Petersburg, Russia                                                      Hungary, Budapest

Medvedev accepted Kudrin’s retirement
                                        During the session of a modernization committee Dmitry Medvedev
                                        proposed Kudrin to hand in resignation during that day in case he
                                        disagreed with the President. On the 25th of September Kudrin
                                        declared he can’t imagine himself working in Medvedev’s team due
                                        to disagreement on some points, one being military expenditure.
                                        Kudrin declared he would consult with Prime-Minister Vladimir
                                        Putin before making his decision.
                                         Dmitry Medvedev signed the decree for resignation of Alexey
                                        Kudrin from the post of Vice-Premier and Minister of Finance –
                                        Natalia Timacova, the press-secretary of the President informed on
                                        26th of September.
                                        Natalia Timakova also said that the cause for the resignation were
                                        explained clearly in the President’s speech.
       Saint-Petersburg, Russia                                                                            Hungary, Budapest


 Bank’s licenses to be reissued
Just in one month's time Russia’s banking system will face a choice: to reissue the banking license or to continue to work,
carrying out operations, which are not covered by the old license, and therefore not quite legitimate.
Yesterday the Bank of Russia updated its site with project draft on reissuing of bank licenses "due to changes in banking
operations naming". The need for reissuing has arisen due to enactment of the Law "On the national payment system" and
amendments to the Law "On Banks and Banking Activity". These amendments (taking effect on September 29), will determine a
banking transaction of "payments settlement on behalf of individuals and legal entities, including correspondent banks, through
their bank accounts" as "making transfers of funds ...". As a result, banks are facing a conflict with legislation: as a matter of fact
their business is not changed, but in the new legal framework, they will carry out operations that are not covered by their
existing banking license.

 Russia will be 160 banks short in 2012
All banks with capital less than 180 mln rub will have to leave the market in January, 2012. They will have chance to survive only
if the banking community lobbies the law protecting the rights of smaller banks.
According to the legislation, since 1 of January all the Russian banks must have at least 180 mln rub capital.
Anatoly Aksakov, the head of the Association of regional banks “Rossia” said that currently nearly 160 banks do not comply with
the requirements of the law, takes legal effect in January, 2012. He also said that 50 of these banks are regional. “Due to the
specifics of these parts of the country, large banks in the North Caucasus work unwillingly, so in 2012 this region can stay
without any banking services”,- Aksakov specified.
Aksakov declared he has already brought in the legislative proposal which would help the small banks with less than 180 mln
capital, to the State Duma. Small banks do not bear the financial risks, so they are not really dangerous for the banking
community. ”We suggest preserving these banks while limiting their licenses. For example, we cannot allow the small banks to
attract funds in deposits from the public. Or to restrict the activity of the bank within a couple of regions”, - Aksakov refined.
Vadim Grishin, the Executive Director of the World Bank, Russia, said the WB is ready to allocate 300 mln dollars to found the
agency in order to support the small banks.
      Saint-Petersburg, Russia                                                                         Hungary, Budapest

      Date          Case number                  Claimant                              Defender                     Details
   01.09. 2011    А40-98152/2011        Bank of Moscow                   “PO Spetskomplekt” CJSC                 Civil
                                        (ОАО АКБ "Банк Москвы")          (ЗАО "ПО Cпецкомплект")
   02.09.2011     А40-98632/2011        Rosbank                          “Miel ZS” LLC                           Bankruptcy
                                        (ОАО АКБ "Росбанк")              (ООО "МИЭЛЬ ЗС")
   02.09.2011     А40-98597/2011        Rosbank                          “Miel- Realty”                          Bankruptcy
                                        (ОАО АКБ "Росбанк")              (ЗАО МИЭЛЬ – Недвижимость)
   02.09.2011     А40-98544/2011        Rosbank                          “Miel-investments to сountryside        Bankruptcy
                                        (ОАО АКБ "Росбанк")              real estate” CJSC
                                                                         (ЗАО "МИЭЛЬ - Инвестиции в
                                                                         Загородную Недвижимость")
   15.09. 2011    А40-102817/2011 Alfa-Bank                              Brestenergo                             Civil
                                  ОАО "Альфа-Банк"                       (РУП Брестэнерго)
   15.09.2011     А40-102819/2011 Alfa-Bank                              Brestenergo                             Civil
                                  ОАО "Альфа-Банк"                       (РУП Брестэнерго)

 Bank of Moscow surcharges 1,448 bln rubles from “PO Spetskomplekt” CJSC
Start date: 01.09.2011
The Arbitration court of Moscow has registered the claim of Bank of Moscow to surcharge 1,448 bln rubles from “PO
Spetskomplekt” CJSC, as credit relations with this company were the cause for initiating a criminal case against john does from
among former directorship of the bank.
Chief Directorate of Internal Affairs’ Main Investigations Directorate open a criminal case aganst john does from among former
directorship of the bank of Moscow who organized credit accommodations to subordinated organizations, as of “PO
Spetskomplekt” CJSC. According to the investigation data, the received finances were stolen, resulting in loss of more than 1 mln
rubles of shareholders’ money.
The claim was registered on the 1st of September, the date for the court session is not appointed yet. Sides have not
commented the case yet.
VTB, the second largest bank of Russia, acquired 46,48% of Bank of Moscow in February 2010 from Moscow city government.
After the deal was completed the new shareholder learnt about a low quality of its credit portfolio. Turned out, that ex top-
manager of the Bank of Moscow credited his own business using the bank’s funds - approximately 330 bln rubles
      Saint-Petersburg, Russia                                                                         Hungary, Budapest

 Rosbank claims to declare bankrupt 5 companies of investment & development holding “Miel”
Start date: 02.09.2011
The Arbitration court of Moscow has registered Rosbank’s claim for bankruptcy of five companies piecing together the
investment & development holding “Miel”.
Rosbank claims to declare bankrupt these companies: “Barviha-Village” CJSC, “Miel- Realty” CJSC, “Golden Mile” CJSC, “Miel ZS”
LLC and “Miel-investments to countryside real estate” CJSC.
The claim came through the court on the 2nd of September, the dates of the court sessions are not appointed yet.
Rosbank had already filed a charge against its obligators, but the court had abandoned all five charges, because the court
decision which confirmed the obligator’s tie did not become effective.
The 9th arbitration court of appeal had confirmed the first judgment to surcharge 24,5 mln dollars from 5 companies of
investment-development holding “Miel” in favor of Rosbank.
Rosbank claimed to surcharge the credit indebtedness for 20 mln dollars, given to “Barviha-Village” CJSC , until May 2011. Other
four companies presented as the backers of bill.

 Alfa-Banks claims to surcharge 30 mln rubles debt from Belorussian “Brestenergo”
Start date: 15.09.2011
The Arbitration court of Moscow has registered 2 Alfa-Bank’s claims to surcharge 30 mln rubles debt from Belorussian
The claim was registered on the 15th of September, the date for the court session is not appointed yet.
The question is a long-term requisitioning of the two credits slump sum 30 mln dollars because of the arrear of payments for
credits. The bank had opened a credit line for the “Brestenergo” in spring of 2010. The company has exceeded the terms of the
both credits because of the situation at the Belorussian exchange market.
Belorussia has faced serious economic problems this year, particularly the deficit in foreign exchange and high rate of inflation
caused by harsh devaluation of Belorussian ruble.
      Saint-Petersburg, Russia                                                                         Hungary, Budapest


 13th Baltic Development Forum (BDF) Summit

24 - 26 October 2011
Baltic Development Forum (BDF)
Gdansk, Poland
The 13th Baltic Development Forum (BDF) Summit will be held together with the European Commission's 2nd Annual Forum on
the EU Strategy for the Baltic Sea Region. The event is co-organised by the Polish EU-Presidency, Pomorskie Region and the City
of Gdansk. It will be attended by decision-makers from business, politics, international organisations and the academic world.
The event will take place at the Polish Baltic Frederic Chopin Philharmonic on the Olowianka Isle in the heart of the old city of
Gdansk. It is an excellent conference venue close to the famous shipyard where the political re-birth of the Baltic Sea Region
began, spearheaded by the Solidarnosc Movement in 1989.

 6th Annual SME Banking Conference

8 - 9 November 2011
Fleming Europe
SME banking is an industry in transition. Many small businesses, like allbusinesses, faced numerous challenges amid the global
economic downturn. Yet the entrepreneurial spirit is alive and well, and the fact remains - SMEs are the drivers of job creation
and economic growth. As the regional economies improve, SMEs clearly play a key role. Our 6th Annual SME Banking
Conference will showcase the experience of individual banks and demonstrate innovative approaches to SME Banking. Pan-
Europeand bankers will discuss how to meet the needs of small and medium businesses in today's economy, looking at the
challenges and opportunities of making a firm commitment to help small and medium businesses to grow.
       Saint-Petersburg, Russia                                                                       Hungary, Budapest

About Analytical Department of Staf-Alliance Security Group

Analytical department is a part of Staf-Alliance Security Group (Russia).

Our target is to render due diligence, background screening and corporate intelligence services with above expectations quality.
Since 2008 we successfully cooperate with a number of leading European contractors and Fortune-500 clients supporting their
decision-making process in Russia & CIS related projects.

With the aim to support our current and future clients we produce free reports on current risks and threads of Russian marker
including monthly open media review of Russian banking.

For more information please visit or
      Saint-Petersburg, Russia                                                                     Hungary, Budapest
About Banking association for Central and Eastern Europe
BACEE was founded in 1996 with the goal of promoting business relations of its member banks with financial institutions of
Central and Eastern Europe.

BACEE membership is open for all banks with good reputation which want to develop their business in “New Europe”.

To support business expansion in the CEE region which generally represents a higher risk than in the developed economies,
BACEE is providing information and analytical services on country and bank risk in Central and Eastern Europe.

On the other hand, BACEE provides consulting services to its CEE member banks which want to develop a more active presence
in international markets. These services include suggestions regarding business policies, transparency, presentation of the
banks’ documentation to foreign counterparts, pre- and post-rating advisory services, attraction of credit lines from foreign
banks and international financial institutions and preparation for sale to foreign investors.

BACEE has created a unique database on banks in the CEE region, which is freely accessible to its members, and has grown into
one of the most important sources of information on banks in Central and Eastern Europe.

BACEE holds regular seminars, conferences and training courses to share its experience with the broader banking community.

Reflecting its non-profit philosophy, events organised by the Association on its own are free for its members. For events,
arranged jointly with co-operation partners, we offer special discount to our members.

For more information please visit

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