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Promsvyazbank

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Promsvyazbank
Native name
Промсвязьбанк
Company typeState-owned enterprise
Industrybanking
Founded1995
Headquarters
Moscow
,
Russian Federation
Key people
Pyotr Fradkov
ProductsFinancial services
RevenueRUB 104.091 billion (2020)[1]
RUB 25.944 (2020)[1]
Total assetsRUB 2764.177 billion (2020)[1]
Total equityRUB 248.423 billion (2020)[1]
OwnerRussian Federation
Number of employees
10000 (2021)
RatingBa3 (Moody's), BB- (S&P) (2017)[2]
Websitewww.psbank.ru

Promsvyazbank (PSB; Russian: ПАО "Промсвязьбанк") is a state-backed, formerly private Russian bank from Moscow. It was owned by the oligarchs Dmitry and Aleksey Ananyev. As of 2012, it is the 10th largest bank in Russia by assets.[3]

The bank was established in May 1995 by the Ananyev brothers, the owners of Tekhnoserv, the largest systems integrator in the CIS. Its first customers were major telecom companies such as Rostelecom. Between 2006 and 2012, a 15,32% stake was owned by Commerzbank.[4] In February 2010, an 11,75% stake was acquired by the EBRD.[5]

As of February 2016, the bank provides services to more than 100,000 corporate and over 2 million private customers.[6]

On February 22, 2022, British Prime Minister Boris Johnson announced sanctions against five banks, including Promsvyazabank in response to the 2021-2022 Russia-Ukraine crisis.[7]

Early history

Promsvyazbank was founded in 1995 in Moscow by brothers Aleksey Ananyev [ru] and Dmitry Ananyev. Initially engaged in services of telecommunication companies, and then began to develop as a universal bank. By the mid-2000s, he entered the top-20 Russian banks.[8]

In the period from 2004 to 2007, the total capital of the bank increased sixfold - from 6 to 36.3 billion rubles, assets - from 41.9 billion to 293.2 billion rubles. Offices of "Promsvyazbank" appeared in 90 settlements of Russia.[9]

In 2014, the Bank of Russia recognized Promsvyazbank as one of the three systemically important banks.[10]

From 2006 to 2012, one of the PSB shareholders was the top German Commerzbank with a 15.32% share. In 2012, he had to withdraw from the shareholders and sell shares to the founders.[11] In 2010, the European Bank for Reconstruction and Development became a shareholder and bought 11.75% of the shares.

At the end of 2016, Promsvyazbank's assets amounted to 1.2 trillion rubles, the corporate loan portfolio amounted to 676 billion rubles, and the retail one - 69 billion rubles. The Bank is among the top-10 Russian banks in terms of attracting private deposits.[12]

Promsvyazbank actively provided loans to the corporate sector. However, after the crises of 2008 and 2014, the quality of these loans declined. The Bank began to practice the seizure of enterprises debtors hoping to recover money from their resale. At about the same time, Promsvyazbank began to actively finance projects of its owners. Which in the end became one of the reasons for his nationalization.[13]

Nationalization

Promsvyazbank's problems began in 2017. The trigger was a letter to clients from the analyst of Alfa-Capital Sergei Gavrilov, in which he named Promsvyazbank among the four problem banks threatened by restructuring.[14] In autumn, the presence of problems was confirmed by Moody`s.[15]

In December 2017, the Central Bank of Russia introduced a temporary administration at Promsvyazbank, and then announced that it had found signs of illegal transactions. Including the disappearance of credit folders worth more than 100 billion rubles was announced.[16] Soon bank co-founders Ananyev brothers left Russia. New administration has been claiming a compensation from ex-owners for the damage it suffered because of their mismanagement. In 2019 their property (planes, cars, paintings, etc.) was sized by court order. Later Ananyevs were charged with multi-million-dollar embezzlement, arrested in absentia and added to Interpol’s wanted list.[17] In December 2020 Interpol removed brothers from list, finding the prosecution as politically motivated.[18] Three years later, Dmitry Ananyev, one of the co-founders of PSB, said that the plan to nationalize the bank and use it for the needs of the defense industry originated from CBR back in 2015. According to the banker, pressure was put on him, including threats to open a criminal case or even kill him.[19]

In January 2018, Central Bank recognized the capital base of PSB as negative and reduced its authorized capital to 1 ruble. PSB was delisted from the Moscow Stock Exchange. In March, the State Duma adopted a law according to which the PSB becomes the property of the state.[20] An additional share issue was carried out in the amount of RUB 113.4 billion. These shares were redeemed at a nominal price by the state Deposit Insurance Agency of Russia, which transferred them to the Federal Agency for State Property Management in May 2018. According to the decision of the Russian government, PSB has become a captive bank for defense sector. Petr Fradkov, the eldest son of the former prime minister (2004-2007) and former foreign intelligence chief (2007-2016) Mikhail Fradkov, was appointed head of the bank (in the position of chairman of the interim administration).[21]

In September, the Central Bank terminated the temporary administration. Petr Fradkov became the chairman of the PSB.[22]

As a result of the reorganization measures, by the end of 2018, Promsvyazbank had RUB 149,5 billion of equity capital and RUB 1280,8 billion of assets.[23]

Concerns about sanctions

Due to the transformation of Promsvyazbank into a "defense" bank, the Russian authorities had concerns about US sanctions. A number of steps have been taken to protect customers and the bank's management. Customers were asked to sell or withdraw foreign securities and convert or withdraw dollar deposits. The composition of the bank's board was classified, Petr Fradkov is the "sole executive body". (He said that he was not afraid of personal sanctions).[24]

On February 22, 2022, British Prime Minister Boris Johnson announced sanctions against five banks, including Promsvyazabank.[25]

Modern history

  • In 2018, the Russian government initiated the transfer of loans issued to defense enterprises to Promsvyazbank. In the summer of 2019, Petr Fradkov estimated their volume at 250 billion.[26]
  • In December 2019, a law was passed that finally endows PSB with the functions of a supporting bank for military-industrial complex. This law prohibited the sale of state-owned shares of the bank.[27]
  • In December 2019, Promsvyazbank became the owner of more than 99% of Sviaz Bank [ru]. This bank had a wide network of branches, was in the top 30 in terms of private deposits and in the top 10 in terms of mortgage lending. The bank has been under restructuring since 2008, its shares were on the balance sheet of the state Vnesheconombank. To transfer Sviaz Bank to a new owner, its shares were first transferred to the Federal Agency for State Property Management. Then Promsvyazbank carried out an additional issue of its shares, which were exchanged for the shares of Sviaz Bank.[28] In May 2020, Sviaz Bank was fully incorporated into Promsvyazbank. This increased its assets by RUB 200 billion, and its capital grew by RUB 22 billion.[29]
  • In December 2020, Promsvyazbank acquired Roscosmosbank, a subsidiary bank of Roscosmos. According to media reports, the bank was sold at the price of the authorized capital (4.19 billion rubles), and as payment Promsvyazbank issued promissory notes with maturity until 2032.[30] The merger was completed by May 2021. The equity of Promsvyazbank increased by 33 billion rubles. 120 subsidiaries of Roscosmos and about 200 thousand employees became its clients. The branch network of Promsvyazbank was replenished with branches at cosmodromes, including Baikonur.[31]
  • According to the report for 2020, the total assets of Promsvyazbank as of December 31 were RUB 2764 billion, total equity was RUB 248.4 billion, operating income was RUB 104.1 billion and net profit was RUB 25.9 billion.[32]
  • In March 2021, Promsvyazbank proposed to the government to create a “capitalization fund” to finance large projects. As conceived by the initiators, when financing projects approved by the state, banks can attract endowment capital from a special fund in the amount of 2 trillion rubles. The proposal is being studied at the Ministry of Industry and Trade.[33]
  • In April 2021, the Bank of Russia approved a plan to transfer the rehabilitated MInBank [ru] to Promsvyazbank. Bad assets will be transferred to Trust Bank.[34]
  • In the April rating The World’s Best Banks from Forbes, PSB was ranked 14th among Russian banks.[35]
  • In 2022 Government of Russia sets up to increase bank`s capital by 13 billion 731 million roubles from public funds[36].
  • In February 2022 the bank acquired non-State pension fund "Gefest" from "United Metallurgical Corporation"[37].

References

  1. ^ a b c d "Консолидированная финансовая отчетность за год, закончившийся 31 декабря 2020 года" (PDF). www.psbank.ru (in Russian). Retrieved 14 April 2021.
  2. ^ "Рейтинг банков - 2017 (таблица)". Forbes.ru. 23 March 2017. Retrieved 1 May 2017.
  3. ^ "Archived copy". Archived from the original on 25 May 2014. Retrieved 23 August 2014.{{cite web}}: CS1 maint: archived copy as title (link)
  4. ^ "Commerzbank Completes Promsvyazbank Stake Sale". The Moscow Times.
  5. ^ "EBRD to buy 11.75% stake in Promsvyazbank". Financial Times.
  6. ^ Company information at psbank.ru, retrieved 8 February 2016.
  7. ^ https://www.bbc.com/news/live/world-europe-60454795
  8. ^ "Промсвязьбанк. Досье" (in Russian). TASS. 17 December 2017.
  9. ^ "Годовой отчет 2007" (PDF) (in Russian). Moscow Exchange. Retrieved 18 July 2021.
  10. ^ "Банк России признал Промсвязьбанк системно значимым" (in Russian). bankir.ru. 5 February 2014.
  11. ^ ""Мы свое все равно берем"". kommersant.ru. 22 February 2012.
  12. ^ "ГОДОВОЙ ОТЧЕТ ПАО «ПРОМСВЯЗЬБАНК» ЗА 2016 год" (PDF). conomy.ru (in Russian). 30 June 2017.
  13. ^ "ЦБ объяснил, что случилось с Промсвязьбанком" (in Russian). Vedomosti. 17 December 2021.
  14. ^ "ЦБ дал оценку письму менеджера "Альфа капитала" о московском банковском кольце". Vedomosti. 17 July 2018.
  15. ^ "Промсвязьбанку указали на слабости". Kommersant. 5 October 2017.
  16. ^ "ЦБ попросит силовиков проверить руководство Промсвязьбанка". RBC. 22 December 2017.
  17. ^ "Moscow rules to arrest in absentia ex-owners of Promsvyazbank". TASS. 10 September 2019.
  18. ^ "Interpol removes former Promsvyazbank co-owners from its wanted list". Meduza. 4 December 2020.
  19. ^ "'I'm presented as a criminal': the banker forced to flee Russia". The Guardian. 14 February 2020.
  20. ^ "Путин подписал закон о передаче Росимуществу акций Промсвязьбанка". Vedomosti. 7 March 2018.
  21. ^ "ЦБ разработал схему ускоренной передачи Промсвязьбанка Петру Фрадкову". RBC. 2 April 2018.
  22. ^ "ЦБ РФ прекратил работу временной администрации Промсвязьбанка". Interfax. 6 September 2018.
  23. ^ "Consolidated Financial Statements and Independent Auditor's Report – Year Ended 31 December 2018" (PDF). 19 March 2019.
  24. ^ "Предправления Промсвязьбанка: "Я не считаю, что банк окажется в изоляции"". Vedomosti. 19 December 2018.
  25. ^ https://www.bbc.com/news/live/world-europe-60454795
  26. ^ "Промсвязьбанк прирос оборонкой". Kommersant. 3 July 2019.
  27. ^ "О внесении изменений в Федеральный закон «О государственном оборонном заказе»". kremlin.ru. 27 December 2019.
  28. ^ "Оборонный банк стал собственником Связь-банка" (in Russian). RBC. 25 December 2019.
  29. ^ "ПСБ завершил присоединение Связь-банка" (in Russian). Vedomosti. 1 May 2020.
  30. ^ "Жить стало векселей" (in Russian). Kommersant. 28 January 2021.
  31. ^ "ПСБ завершил процесс присоединения Роскосмосбанка" (in Russian). banki.ru. 1 May 2021.
  32. ^ "Consolidated Financial Statements for the Year Ended 31 December 2020" (PDF). PSB. 11 February 2021.
  33. ^ "Цикл уехал, инвесторы остались: банки просят 2 трлн на новые проекты" (in Russian). Izvestia. 18 March 2021.
  34. ^ "Новый план ЦБ для МИнБанка предполагает его передачу Промсвязьбанку". 29 April 2021.
  35. ^ "World's best banks". Forbes. 13 April 2021.
  36. ^ "Промсвязьбанк планируют докапитализировать почти на 14 млрд рублей в 2022 году" (in Russian). ТАСС. 21 September 2021.
  37. ^ "Коммерсантъ сообщил о покупке Промсвязьбанком НПФ Гефест" (in Russian). Интерфакс. 3 February 2022.


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