Bank of Moscow

The Bank of Moscow (Closed Joint Stock Company)

Traded as	MSKB@RU
Industry	Banking
Fate	Active
Founded	1995
Headquarters	Moscow, Russia, Russia
Number of locations	42 branches in Moscow and Moscow region and 43 branches in major cities of Russia
Area served	Russia
Key people	Andrei Kostin (Chairman), Mikhail Kuzovlev (chairman)
Services	bank accounts, debit and credit cards, safety deposit boxes, financial intermediation, cash and non-cash money transfers, currency exchange, lending and investment services,
AUM	RUB 669 bln
Total assets	RUB 958 bln
Total equity	121,6 billion rubles. (2009, IFRS )
Employees	10504 (30 September 2009)
Parent	VTB
Subsidiaries	BM Bank (Kiev, Republic of Ukraine), Bank Moscow-Minsk (Minsk, Republic of Belarus), AS Latvijas Biznesa Banka (Riga, Latvia), AS Eesti Krediidipank (Tallinn, Estonia)
Website	www.bm.ru

The Bank of Moscow (Банк Москвы) is the fifth largest bank in Russia,^[1] providing banking services to both corporations and individuals. The bank currently provides services to over 100,000 corporate customers and over 7 million citizens. The bank has its offices in nearly each major economic center of the country and has 380 stand-alone outlets which include sub-offices and cash desks.^[2] The full name of the company is The Joint-Stock Commercial Bank "Bank of Moscow" (Open Joint Stock Company). The bank's headquarters are located in Moscow. In 2011, following a hostile takeover by VTB Bank, US$9 billion in fraudulent loans were discovered, and the bank received an unprecedented US$14 billion bailout.^[3] Russia has issued an international arrest warrant for Andrey Borodin for his suspected role in the fraud.^[3]

History

The Bank of Moscow was originally established in 1995 as a joint-stock commercial bank "Moscow Municipal Bank - Bank of Moscow." In April 2010, Moscow Mayor Yury Luzhkov signed a decree to support the bank's funds from the municipal budget of Moscow. Under this order, the bank should have been allocated 7.5 billion rubles (approximately 247 million US Dollars) for the purchase of additional shares of the bank.^[4]

Privatization of the Bank

As of February 2011, the Moscow government's 46.48% ownership had been completely sold to VTB Bank. VTB also acquired 25% plus one share of Capital Insurance Group, which had a 17.32% stake in the Bank of Moscow. The total purchase price was 103 billion rubles. Besides VTB, the Russian Alfa Bank,^[5] and Bank Austria, a subsidiary of UniCredit,^[6] declared great interest in buying the Moscow government's stake. The sale was made to VTB (according to the representative of the Moscow mayor's office) because of a higher price offered and the availability of complete documentation, including a permit to purchase from the Russian Federal Antimonopoly Service.^[7] In March 2011, VTB bought shares owned by Credit Suisse (2.77%) and shares owned by a Swiss fund (1.7%),^[8] bringing its stake to a controlling interest of approximately 51%.

In early April 2011, Andrey Borodin and Lev Alaluyev sold their 20.32% stake in Bank of Moscow to Vitaly Yusufov, son of the former Russian Energy Minister Igor Yusufov.^[9] Vitaly Yusofov had borrowed US$1.1 billion from the Bank of Moscow for this acquisition.^[10]

Borodin himself, who by this time had been indicted in absentia for abuse of office, said that the transaction was carried out with a "torn off by hand",^[11] and that the change of leadership at the bank led to the raids.^[12] By the end of September 2011, VTB had acquired more than 80% of the shares of the Bank of Moscow,^[13] buying from Vital Yusufov (20%), and Suleiman Kerimov (3.88%). Shares were also acquired as part of a package of the Metropolitan Insurance Group.^[14]

The media suggested when Borodin left, more than half of the bank's loan portfolio consisted of loans issued to companies affiliated with Borodin. Borodin himself refused to comment on this information.^[15] According to an investigation by the newspaper "Vedomosti", the total amount of loans granted by the bank to companies associated with Borodin was approximately 217 billion rubles, which exceeded the bank's equity. According to the newspaper, a significant part of these loans were used to repay loans which were dubious or not secured by liquid assets,^[16] and later this information was confirmed by an inspection of the Accounts Chamber of the Russian Federation.^[17]

Later, it was announced by VTB that the bank had 380 billion rubles in bad debt.^[14] As a result, in late September 2011 the Deposit Insurance Agency provided a loan for 10 years, amounting to 295 billion rubles. At 0.51% per annum (DIA itself provided the money to the Bank of Russia) to cover the newly formed "holes" in the accounts of the bank.^[18][19]

Owners and management

The main shareholders are VTB (95.52%) and the Capital Insurance Group (1.51%). Total Capitalization at that time amounted to 151.85 billion rubles.^[14] Chairman of the board of directors of 24 February 2011 - A L. Kostin. President - Michael Kuzovlev (until 12 April 2011 - Andrey Borodin).^[12]

Presence

The Bank has a presence in almost all the economically important regions of the country and has 380 separate units, including sub-offices. As of 1 January 2012 the bank had 208 branches in Russia, with more than 100 thousand corporate and more than 9 million private customers. The central office is located in a former bank building of the Moscow Inter-Bank in Moscow, at the corner of the Kuznetsk bridge and Rozhdestvenka. There are 141 offices of the bank in Moscow with 474 post and bank offices in the capital region.^[20] The network also includes the Bank of Moscow's four subsidiary banks outside Russia: BM Bank (Ukraine), Bank Moscow-Minsk (Belarus), the Estonian Credit Bank (Estonia), and the Bank of Moscow - (Belgrade) ( Serbia). The Bank is also represented in Frankfurt am Main (Germany).

The Bank of Moscow operates its own processing center, serving the bank card program. The bank has issued more than 13 million cards. The processing center is certified by Visa International and MasterCard and has a wide network of ATMs (1.9 thousand units).

Performance

On 1 March 2011, the assets of the Bank of Moscow amounted to 867.7 billion rubles. Capital, when calculated in accordance with the methodology of the Bank of Russia, is 140 billion rubles.

Rating

International credit rating agencies assign ratings to the bank:^[21]

• The agency Moody's Investors Service: Long-term deposit rating - Ba2, outlook "stable"
• The agency Standard & Poors: Long-term deposit rating in local & foreign currencies - BBB, outlook "stable"
• Brand Finance Agency in February 2011 estimated the brand of the Bank of Moscow to 842 million U.S. dollars and include it in the top 200 leading financial brands in the world ^[22]

References

External links

• bank website

v t e 50 largest banks in Russia in terms of net assets In alphabetical order, as of December 2013 AIKB Tatfondbank Ak Bars Alfa-Bank Asian-Pacific Bank Avangard Bank Bank of Khanty-Mansiysk Bank of Moscow Bank Saint Petersburg B&N Bank Citibank Credit Bank of Moscow Credit Europe Bank Deutsche Bank Gazprombank Globexbank HCF Bank ING Bank MDM Bank Moscow Industrial Bank MTS Bank National Bank Trust National Clearing Centre NOMOS-BANK Nordea Novikombank Orient Express Bank Otkritie OTP Bank Petrocommerce Promsvyazbank Raiffeisenbank Rosbank Rosselkhozbank Rossiya Russian Standard Bank Sberbank SKB-Bank SME Bank SMP Bank Sovcombank Sviaz-Bank Transcapitalbank UniCredit Ural Bank for Reconstruction and Development Uralsib Vneshprombank Vozrozhdenie VTB VTB 24 Zenit Source: Banki.ru