Chapter Svyaznoy Bank : “there Were only two choices — bad and terrible”

Chapter Svyaznoy Bank : “there Were only two choices — bad and terrible”


On October 1, all three indicators of capital adequacy Svyaznoy Bank has dropped below 2% — the level at which, by law, the CBR is obliged to revoke a credit institution license. Now the N1.0 is 0.99%. This was told by a source familiar with the situation in “the Messenger”, and confirmed the press service of the Bank.

The events leading up to the collapse of the Bank, began almost a year ago. Then owner of GC “Svyaznoy” Maxim Nogotkov not able to pay off the loans. He was sent a notice of default on the debt, the collateral for which was made by the controlling holding company of the group. When this became known, the Bank survived the panic of investors on the very first day they took 3 bn and for Jan — 11 billion rubles.

Already in possession of the Bank by businessman Oleg Malis showed no interest in the Bank, while the Central Bank didn’t even know who the new owner is and with whom to conduct a dialogue.

In March, the management wrote a letter to the shareholders with the request to add to the capital of 5 billion rubles or if the Bank violates the regulations of the Central Bank. Shareholders of the money was not given, and by April 1 the capital adequacy ratio of the Bank dropped to 9,19%.

The Bank’s management estimate that if shareholders do nothing, the capital adequacy ratio will decline by 2 PCT in the month and in August, pierce the critical level of 2% at which the Central Bank is obliged to revoke the license. In March, the Central Bank has checked Svyaznoy Bank and came to the conclusion that the Bank needed recapitalization in the amount of 5-6 billion rubles, wrote earlier .

Last resource Svyaznoy Bank used in July, writing off subordinated debt from the company Trellas and owner of Finprombank Anatoly Goncharov. Loan three for a total amount of 1.64 billion rubles of Them can be written off, if the regulations strike the critical level of 2%.

This action helped the Bank to improve the adequacy of basic and capital to 3.16%. Marketing Director of Sviaz Bank Anton Goltsman then confessed that to replenish capital is more than nothing. Hope to help the shareholder. However, the management of Svyaznoy Bank approached him with a letter back in March and requested the recapitalization of the Bank at 5 billion roubles, having warned that otherwise there will be problems with compliance with Central Bank regulations.

Help never came, and realized the scenario described in the financial statements of the Bank for 2014. There management wrote that hopes to attract an investor who will be able to capitalize the Bank at 8.3 billion rubles. otherwise, “there is doubt” that the Bank would be able “to continue its uninterrupted activities and obligations”.

Now the Bank has the checking of the DIA, the two sources do not exclude that the decision will be made about rehabilitation.

Chairman of the Board of Sviaz Bank Evgeny Davydovich a year ago, when the Bank started having problems, decided under no circumstances not to leave him on his own initiative: “to Put resignation and leave, it would probably be the easiest solution. In any situation there are three choices: Sheremetyevo, Domodedovo and Vnukovo. But we chose a fourth: simply to be here every day and work hard and do what you can do”. Davidovich soberly assess the situation, but calm, even ironic: “what did you expect to see here — a rope and a bar of soap?”

Svyaznoy Bank in figures

Almost in 2,5 times, up to RUB 30 billion, decreased assets Svyaznoy Bank to Russian standards from November 2014 until 1 September 2015

143-th place by assets is Svyaznoy Bank. In November 2014 he was included into the first hundred

In 7.3 times, up to 823 million rublesfor the same period decreased the Bank’s capital. The loan portfolio has decreased in 2,2 times, to 19.8 billion rubles.

98% of the Bank’s assets are loans to individuals, 44% — overdue

5,3 billion rubles amounted to the loss of the Bank in September of 2015 against a profit of 315 million rubles on November 1, 2014

RUR 14.6 billion was the volume of deposits of physical persons on 1 September , which is three times lower than the same indicator on 1 November last year

99% of deposits, according to Eugene Davidovich, covered by public insurance, i.e. does not exceed 1.4 million rubles.

“I ran the main business of the Bank”

— They say your decision to stay on duty and not take advantage of one of the three outputs has surprised even employees of the Central Bank.

— Was this. In the first week after the Christmas holidays of 2014 I had to be on medication, I warned one of the leaders of the Central Bank, which in December, we talked almost daily on not the most pleasant questions. I called him from abroad, described the current situation in the Bank, and reminded me this week in the office will not. When after seven days the head of the Central Bank called me, he was surprised to find me in the workplace. And with his mouth: “That’s amazing!”

— You worked in a Connected Bank from the beginning, right?

— Yes, I came to the Bank, when it was not yet — on 15 September 2009, joining the team of a few people.

— You Nails called?

— Yes, although we spoke with him, probably, five times. I was surprised at his suggestion, but at this time just looking for options to move from Kiev to Moscow, so was delighted and agreed. In Ukraine I was quite well-known banker — Deputy CEO in UkrSibbank, which was later acquired by the French group BNP Paribas, then head of the Ukrainian branch of “Russian standard”. So retail banking (as Marigold was going to create a Bank for individuals) was familiar to me not by hearsay.

I managed the core business of the Bank card. The business was specific. The main product — a credit card was a debit at the same time, with interest on the balance and a credit card, that is, the customer received a limit to which you can climb, after their own funds. Furthermore, this same map was attached to the Safe Deposit. Svyaznoy Bank developed rapidly. In 2011, our retail business grew by hundreds of percent per month.

— This led to the fact that in November 2012 the Central Bank introduced the Bank restriction on acceptance of deposits.

Yeah, first three months, then extended the injunction at the same rate. By this time the “Messenger” in terms of deposits became the 36th (46.6 billion roubles) among all banks. According to the instruction of the Central Bank, the Deposit base was not supposed to grow more than 1% per month.

“Shareholder did not hide that the Bank is not included in the contours of his interests”

And with this began the problem of the Bank.

— I’d say the first challenge. Business plan “Liaison” was built on the basis of rapid growth of credit business. Even after the injunction was lifted, the Central Bank encouraged us to conduct business “more than moderate”. The controller, apparently, felt that our business model may not be sustainable. Passive base was diversified, concentration risk was high, therefore, objectively speaking, the regulator acted reasonably.

90% of our asset portfolio held credit cards, that is, in essence, the neverending story: the borrower to repay the loan, has the right to take a new one. Social and macroeconomic factors on the product impact is stronger than for conventional loans. In addition, we very much depended on depositors ‘ funds. Fortunately, we all knew it and free liquidity was invested in securities, thereby obtaining opportunity during the crisis to return to people money. I mean that ill-fated November 2014.

— When the Marigolds failed to repay the loans and he received a notice of default?

— We have worked in difficult conditions, had already problems with the quality of the loan portfolio and understand that the Bank needs to capitalize. And on November 10 of one major publication [Kommersant] released an article about it. As a result, the Bank survived the panic of investors on the very first day they took 3 bn for the whole of November, the Bank lost 11 billion rubles.

Chairman of the Board of Sviaz Bank Evgeny Davydovich
Photo: Artem Goloshchapov for

— Why Marigolds in a timely manner did not help the Bank?

— Know how? People get sick, then recover. Maxim had this project. Although in November, he even actively helped us, continuing the search for investors and found in the end subordinated debt, on which we have long handed. By mid December we were able to stabilize the situation, the outflow of deposits stopped. But then due to the devaluation of the ruble the Central Bank sharply raised its key interest rate by 6.5 percentage points to 17%, and a few days later came the news that businessman Oleg Malis bought ONEKSIM debts, which served as an additional catalyst problems. Had to use the whole “body fat” to cope with the situation, but avoid the really difficult phase of the business has already failed: it was necessary to introduce limits on cash withdrawals.

I communicated daily with the Central Bank, something promised to the people, but knew that to get help. Since the beginning of 2015 after shareholder conflicts reached a peak, we didn’t expect any help from Maxim. Plus you have to understand the circumstances: even if he was financially able to help the Bank, in the conditions of the strange situation with their assets it wouldn’t do it. As a new shareholder of the Svyaznoy group of companies did not hide that the Bank he got in the load, and from the first meeting did not hide that the Bank is not included in the contours of his interests, so we didn’t expect help at all from anyone.

The only way to cure the Bank — this powerful injection in the form of recapitalization. And here are all the next 11 months we knew it. Investments in the current macroeconomic situation, it was impossible to find, although many with whom I talked. There were only two choices: bad and terrible. Bad is sanitation, and, in fact, in the hope of her whole team in recent months and worked. Terrible — revocation of license.

— You realize that there is no help. Why did you stay?

— If we compare the Bank with the vehicle, i.e. the same rule: the captain leaves the ship last, although, in principle, history has known cases when the captains of sinking ships nearly first sat in the boat. The most difficult thing is finding the motivation every day to go to work and perform job duties, sometimes not really knowing why I myself need all this. But some employees of the Bank came and said, “Eugene, we will be with you until the end, won’t look for a job”. Perhaps those words had been the best motivator to be here in difficult time, because you can’t cheat people’s confidence in you personally.

“While the patient breathes, and the doctor hopes”

— One time readjustment “Liaison” was interested in “the Renaissance the Credit”, which even has filed an application in Federal Antimonopoly service, but by September he abandoned the idea. Why?

— I don’t know. Decisions about readjustment are taken not only in Bank and in other offices. Hypothetically, a decision on reorganization may be adopted now. As the doctors say, until the patient is breathing — the doctor hopes.

— What do you all these 11 months been doing, except that I went to the office?

— “The messenger” until recently, remained operational Bank, despite the closure of all offices and the ban of the regulator on account opening and replenishment of deposits. Still have the collection, which collects debts, call center, serving customers, taking 5-6 thousand calls a day, although it certainly does not compare with 30 thousand calls on the peak of our development.

My main job was keeping the parts of the team and dealing with creditors. And something was possible. For example, nobody believed that we were in August to repay bonds, which in the winter were traded at a discount of 65-70%. But we had paid! It turns out that those who venture, in August this risk is fully covered. Svyaznoy Bank also carried out a complex deal with Tinkoff Bank, after selling him several tranches a portfolio of quality loans.

Although, frankly, I don’t understand how the Bank since November have managed to stay alive for almost a year. The Bank violated the regulation after another, and every time I thought all this month and certainly the last. Jokingly we can say that, probably, in fact, since January of this year, we did a great job normally performed by the provisional administration, which the Central Bank injects into banks during the crisis. Maybe I will later come in handy as a crisis Manager, but seriously — it’s silly to say that we did everything correctly that the situation in which we now find ourselves, has only led external factors, that all are bad and we are good in life.