Vasily Pozdyshev easily said goodbye to a trillion

The Central Bank estimated its losses from bank reorganization, which will amount to 0.75–1.44 trillion rubles.
The Central Bank will miss from 750 billion to 1.4 trillion rubles. of funds spent on bank restructuring using the new mechanism, Vedomosti was informed by Central Bank Deputy Chairman Vasily Pozdyshev in response to a question about what the regulator’s real loss is from new readjustments and how much he has already guaranteed to lose. The amount of losses will depend on the fate of claims for damages by former controlling parties, he said.

The Central Bank began to recover banks in a new way in 2017 with major players: that year, he took Otkrytie FC, Binbank with its sister Rost Bank, and Promsvyazbank with a subsidiary AvtoVAZbank for reorganization. Later, the Asia-Pacific Bank (ATB) and the Moscow Industrial Bank (MINB) went for recovery.

The Central Bank focused the troubled assets of the first three groups on the balance sheet of Trust, which became a bank of bad and non-core assets. The regulator had to finance the repurchase of these assets. “The total amount of assets that fell into the perimeter of financial recovery in 2017 is 7 trillion rubles. Of these, we estimated 2.4 trillion rubles. as problematic and non-core, which began to unite non-core assets into a bank, ”recalls Pozdyshev. - Another about 300 billion rubles. the troubled assets remained in Otkritie FC - in order to maintain continuity in working with them and not to make Otkritie’s balance sterile. ”

According to the Central Bank

Part of the assets is 233 billion rubles. - managed to return even during the formation of the Trust in 2018, says Pozdyshev. Over the next five years, another 482 billion rubles will be returned from the Trust balance sheet, he expects. The deputy chairman of the Central Bank also expects to return most of the non-core assets left on the balance sheet of the Discovery group - 250 billion rubles. But the Central Bank expects to do this when selling the bank.

Altogether, the Central Bank expects to return 965 billion rubles, or 40.2%, from the “certain contour of troubled assets of 2.4 trillion rubles,” Pozdyshev points out.

Losses of the Central Bank in this case will amount to 1.44 trillion rubles. Their regulator intends to reduce due to claims against former owners. “So far, the assessment of the volume of these claims is about 750-800 billion rubles. Now, such claims have been filed by Otkrytie FC and Promsvyazbank (the amount of the claim for Otkrytie is 290 billion rubles, for Promsvyazbank 282 billion - Vedomosti). For the other sanitized banks - Binbank, ATB and MinBu - such claims will also be filed. We expect that part of the losses of the Central Bank and the state for reorganization will be covered under these lawsuits, ”said Pozdyshev. If 750 billion rubles is returned as a result of the proceedings, the total return will be about 70%, if half - then 55%, he says.

But the Central Bank cannot recover all their losses from them, he complains: “When filing these claims, the Central Bank is not obliged to calculate its actual losses (they can be understood only at the end of all lawsuits and related enforcement proceedings), but follow the formula defined in bankruptcy law. Perhaps the practice of applying these standards will raise the question of their revision so that the Central Bank can include most of its losses on the financial health of banks in its claims. ”

All for sale

In addition to financing the Trust, the Central Bank provided capital to the banks being rehabilitated. Together - 806.4 billion rubles. The Central Bank plans to return these funds, in part or in whole, by selling banks. ATB was the first to bid, but none of the bidders came, and the Central Bank postponed its sale until 2020. The regulator tried to sell the bank for 0.6 capital. Otkritie FC should be ready for sale by 2021 - according to its strategy, then 20% of the shares should be sold. The MinB regulator intends to sell no earlier than the summer of 2020.

The Central Bank does not disclose how much of this money is planning to return.

It is unlikely that he will be able to recoup the costs of recapitalization of banks through their resale, says Yuri Belikov, Managing Director for Validation of Expert RA. When the banks went for reorganization, their capital was negative, which means that the Central Bank had to first pour in the funds in order to fill the hole, and then form the capital so that the bank could comply with the standards and build up the business, he explains: “In the best case, the Central Bank will be able to sell "banks from the Federal Security Service Commission for this positive capital, but the funds spent on patching holes, he will not return - the buyer will not pay for it."
The Central Bank could return part of the money at the expense of dividends. Over the past year, FC Otkritie received 90 billion rubles. IFRS net profit and plans to pay 2 billion rubles. dividends. “The profit <...> was formed largely due to the restoration of reserves after the transfer of distressed assets to the balance of the Trust, which means that there is really nothing to pay upon. But even if the banks make a profit from operating activities, the Central Bank will most likely prefer to leave it in capital so that banks can grow and their value grows, ”Belikov believes.

According to experts

The return level of 40–70% looks quite optimistic, taking into account that former bank owners often issued obviously bad loans, including directly or indirectly to related parties, says Irina Nosova, deputy director of the ACRA agency rating group. Before the advent of the provisional administration, the volume of such loans could increase, while servicing the old ones worsened, she continues, which also reduces the chances of a return of 40–70%.

Given the historical level of reimbursement, the declared 40% seems to be very optimistic and achievable only in the case of the sale of rehabilitated banks in a favorable situation, believes Mikhail Doronkin, head of the bank ratings department of the NKR agency. A successful sale of Otkritie would return a significant part of the costs, but its horizon is difficult to determine, the analyst believes: this will be an unprecedented deal.

The figure of 40.2% looks overstated (and losses of 1.44 trillion rubles, respectively, underestimated), if we compare them with the general market practice, that is, with how problematic requirements are recovered by the "old" reorganization mechanism, including including the Deposit Insurance Agency, says Belikov. 40% is not such a bad result, even by the standards of the entire banking system, because, according to the estimates of the same Central Bank, the real value of assets established by a survey of temporary administrations of bankrupt banks in 2018 amounted to an average of 38% of that reflected in reporting and 42% - a year earlier, said Moody's analyst Olga Ulyanova. “A reimbursement of 55% and even more so 70% could be called a victory, but it all depends on the timing,” she argues, we must take into account the cost of money over time - lawsuits and the search for assets can drag on for years, or even decades, and will certainly require significant costs.

Even if all claims are fully satisfied, they still have to recover these funds from former bank owners, Belikov said.

Claims are filed against the beneficiaries of collapsed or rehabilitated banks almost always. In the case of small banks, the owners of which are located in Russia, such matters end successfully. But if we talk about large banks and multi-billion dollar claims on former beneficiaries who have fled abroad, it becomes extremely difficult to recover the damage, says Alexander Zablotskis, head of A1 Legal Department (the company is suing Vneshprombank's former co-owner Georgy Bedzhamov): “Former owners of such banks, as a rule, they are already abroad, litigation in foreign courts can cost the bank millions of dollars, which bankrupt banks, as a rule, do not have, or bank creditors There is a desire to approve such expenses. In the case of rehabilitated banks, the situation, however, is better, and financing is usually found. ”

But even if the court fully satisfies the requirements, the assets of the former owners are already carefully hidden and it is very difficult to get to them, Zablotskis concludes.