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Kommersant: VEB will live to see full recovery. Svyaz-Bank and Globex won’t be sold in a period of five years

4 september 2009 года
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Kommersant
№ 163 (4218) of 04.09.2009
Elena Kiseleva

 

In the coming five years Vnesheconombank (VEB) intends to retain control over the two banks under reorganization – Svyaz-Bank and Globex. At the same time, VEB believes that it doesn’t make sense to incorporate them into a single institution. Yesterday, VEB Chairman Vladimir Dmitriev told Kommersant that the Bank made such a proposal on Wednesday at a meeting of its Supervisory Board chaired by Vladimir Putin. The ultimate future of VEB’s subsidiary banks will be determined in a month when the state bank submits a concept of their development agreed upon with relevant authorities to the government. Vladimir Dmitriev told Kommersant about VEB’s plans to retain control over Globex and Svyaz-Bank. “We regard these banks as members of VEB’s Group and in the coming five years we think it is necessary to retain them in our Group. They should develop on their own but VEB must exercise stringent control over them,” he said to Kommersant adding that VEB plans to establish a subdivision within itself that will be responsible for coordinating its subsidiary banks activities. According to Mr. Dmitriev, he made these proposals at a meeting of VEB’s Supervisory Board on Wednesday evening. “I hope that the idea would be welcomed, we were instructed to agree upon a concept of VEB’s subsidiary banks development with relevant authorities within a month”, said Vladimir Dmitriev.

VEB purchased Svyaz-Bank and Globex at the last year’s end within the measures for stabilizing the banking sector. The two transactions were financed by the Central Bank by way of placing deposits with VEB for an amount of 2.5 billion dollars to reorganize Svyaz-Bank and 2 billion dollars to reorganize Globex. At the beginning of this year, VEB was instructed to formulate a concept of its subsidiary banks development by June. The Bank hired Ernst and Young Company to develop the concept. There were several options for VEB’s subsidiary banks development in the report prepared in summer including a merger of Svyz-Bank with Globex as well as their sale to an outside investor. Yesterday, Vladimir Dmitriev told Kommersant that “an issue of merging these banks is not on the agenda any longer”. “This option was under discussion but we decided that it offered no prospects”, said Mr. Dmitriev.

The second option – the potential sale of the two banks being reorganized by VEB to an outside investor – was made public in summer by VEB Deputy Chairman Anatoly Tikhonov. He said then that a major foreign investment bank showed interest in Svyaz-Bank (see Kommersant of June 22). On Wednesday, news agencies quoted Mr. Dmitriev as saying that such an option might be authorized by the Bank’s Supervisory Board at its meeting in the near future, but yesterday he told Kommersant that the sale of Globex and Svyaz-Bank might take place in the distant future only after these banks got back on their feet. “Sooner or later we’ll have to repay the Central Bank’s deposits worth 212 billion rubles for the servicing of which we have to pay 13 billion rubles annually”, he explained to Kommersant.

Analyst Dmitry Dmitriev from VTB Kapital believes that VEB’s refusal to sell its subsidiary banks is quite a logical step under the current market conditions. “VEB wouldn’t be able to sell the banks at an acceptable price: there is no doubt that the banks have problem assets and now even trouble-free banks are traded at a big discount. It would be more expedient to invest money to strengthen these banks and prepare for selling them as they are reorganized and as market conditions improve, believes the analyst. Leonid Slipchenko, an analyst from Uralsib, goes along with him. “In three-five years from now these assets would look more attractive and would be more expensive. “It would be problematic to reorganize these problem banks for a shorter period of time”, he says.
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