Why Peter Fradkov will head Promsvyazbank

The officials explained the new appointment of the son of the former prime minister.
On Friday, Finance Minister Anton Siluanov said that the sanated CB Promsvyazbank, which was decided to make the main bank for servicing the state defense order and large state contracts, will be headed by the head of the Russian Export Center, former member of the VEB board Pyotr Fradkov. Later, Fradkov himself stated that he was already participating in the preparation of the regulatory framework for transferring state defense orders to the bank.

The officials interviewed by Vedomosti explained why it was decided to set up a special bank servicing the defense industry, and why 39-year-old Petr Fradkov, the son of the former prime minister (in 2004-2007) and the director of the Foreign Intelligence Service 2007-2016) of Mikhail Fradkov.

The need for a special bank arose after the adoption in August of a new American law on sanctions against Russia, explains the top manager of one of the defense-industrial holdings. Under it, sanctions - up to blocking assets in the US - can be extended to any companies that have entered into significant deals with the vast majority of major defense holdings in Russia. Sanctions and the structures falling under them will be determined in the coming weeks, he says. After that, the largest banks of Russia, which account for almost all banking services for enterprises carrying out state defense orders, will be in jeopardy. The main task of Promsvyazbank will be bank support, settlements with contractors - defense enterprises and their lending.

Petr Fradkov understands the banking sector and is familiar to people from the military-industrial complex, explains the appointment of an employee of the government apparatus. To head Promsvyazbank in its new role was a banker who would be trusted by both military and industrialists participating in the state defense order, supported by a federal official. And he adds that the hardware weight of his father played a certain role in the appointment. Including due to family ties Fradkov is a person who is trusted at the highest level, the former employee of the Central Bank agrees. Fradkov himself in an interview with Vedomosti in 2015 admitted that his father helped him, but only at the beginning of his activities.

I got acquainted with the Russian defense industry Fradkov while working at the Russian Export Center - he headed this structure from January 2015 (at first - in combination with work in VEB). This structure was created for the state support of non-primary exports and providing exporters with financial and organizational support. In the REC, Petr Fradkov was involved in, among other things, diversification of industrial exports, the top manager of a large defense-industrial holding told, and studied in detail the Russian aircraft industry, shipbuilding, and interacted with manufacturers of air defense equipment.

One of the interlocutors of Vedomosti notes that the maintenance of the state defense order is not just a market business, as well as what Vnesheconombank is doing, for example, where Petr Fradkov worked as the first deputy chairman until June 2016.

Proceeding from the new role of Promsvyazbank, this is a logical destination, says Dmitry Shevchenko, director of the Association of Factoring Companies (AFC). Petr Fradkov, in his words, "a man who can listen and analyze." "A competent and very executive manager" calls Fradkov an employee of one of the ministries. At first they were skeptical towards him, another federal official remembers, because they considered him to be a "daddy's son", but over time, using the example of the Export Credit and Investment Insurance Agency (EXAR, the daughter of the Russian Export Center), he showed that he can solve the problems set for him tasks.

Fradkov is "an extremely successful leader," says the general director of the RFPI, Kirill Dmitriev: "He has repeatedly proved his ability to achieve results, not only in the banking sector, but also in development institutions. He effectively built the work of ExCAR and REC, which ensured a significant increase in the volume of non-primary exports. His managerial experience will help him to make the new structure a successful, powerful, universal bank that will not only effectively serve the state defense order and state contracts, but will also be one of the leaders in corporate and retail banking business. "