Financial crisis causes assets to change hands

Graham Stack for business new europe (www.businessneweurope.eu)
State-owned VEB, also known as the Development Bank, agreed to buy a 98% stake in top thirty private bank Sviaz Bank, which failed to meet obligations last week. This was the first government bail out of a major private bank since the stock market sell off and liquidity crunch last week.

Sviaz Bank, although a private bank, is involved in distribution of pension money, making it too important to be allowed to fail.

“Svyaz Bank bears a large social responsibility for transferring money for the payment of pensions and social benefits … across the entire country,” a Sviaz Bank statement said yesterday.

Sviaz Bank is closely connected with state company Russian Post that distributes pensions through its vast network of post offices.

Sviaz Bank CEO since autumn 2007 is Alla Alyoshkina. Alyoshkina held a senior position in Russia’s largest bank Sberbank until Sberbank management was changed last autumn.

Alyoshkina is seen as very close to Andrei Kazmin, former Sberbank CEO until the management change last year. Media reports allege she is his common law wife.

Kazmin was reshuffled from head of CEO to head of Russian Post, and Alyoshkina move to head Sviaz Bank was obviously connected with his move to the post office.

As of August, Svyaz Bank held 60 percent of its assets in Russian equitiesand found itself unable to answer margin calls from its creditors last week.

Investment bank KIT Finance found itself in a similar position last week, and sold out to Leader asset management company, a Gazprom affiliate.

And on Monday September 22, Russian investment banking was shocked by the news that metals oligarch Mikhail Prokhorov had agreed to buy a 50% stake in top investment bank Renaissance Capital for only $500m.

Despite the deal, Fitch Ratings downgraded RenCap’s individual rating to D from C/D and the outlook for its default rating to negative from stable yesterday September 23. Standard & Poor’s placed Renaissance’s long-term rating on credit watch for a downgrade, citing liquidity concerns.

On Monday September 22 rumours were also swirling that Sberbank was in talks to take a stake in Renaissance’s arch rival investment bank Troika Dialog. Later in the week, Sberbank denied it was considering acquiring Troika.

IN other banking sector ownership changes, Rossiisky Promyshlenny Bank, or Rosprombank, has been sold to a foreign investor, a banking source told Prime-Tass Tuesday, September 23.

Also, Ivan Tyryshkin, the former CEO of Russian investment bank Aton Capital, has bought Russia’s Pioglobal Asset Management, according to Prime Tass.

Pioglobal Asset Management was owned by its CEO Yevgeny Kogan and Russian tycoon Alexander Gaidamak, according to business daily Kommersant. Kogan and Gaidamak also own investment bank Antanta Capital.

The deal comes in the wake of severe losses incurred by Pioglobal Asset Management as a result of the recent stock market meltdown, Kommersant reported.

Finally, Deutsche Bank, which took over United Financial Group from former Finance Minister Boris Fyodorov in the period from 2004 to 2006, has recently concluded a deal to buy another of Fyodorov’s assets, UFG Asset Management, according to Kommersant.