Mikhail Gutseriev may be left without RussNeft, Russian Standard is preparing to go to the panel, and the rest of the banks are gutting the surviving clients who use at least some gray schemes. Now it is not a matter of sentiment, the only question is what is the level of problem loans in the Russian financial system – 10 or 20%?
If it is 20%, not only will there be jailings, but also the topic of fighting against negligent bankers-oligarchs will be raised during the pre-election period. The nervousness of American sanctions, the dire situation with the budgets of the Russian regions, and cautious inquiries on the topic of “draining Donbass” add pepper to this cauldron of sentiment. The “compromise” party in the Kremlin believes that this will prevent the ruling regime from being “behind the Iron Curtain” in the future.
Boiler room
1. There are already challengers for Gutseriev’s assets.
Gutseriev’s family is transferring its assets worth 70 billion rubles to the Central Bank, while the family’s total debt is 8 yards of bucks. But the rest of the assets are pledged in other banks, so the regulator will receive several times less money than the hole in the capital of Binbank. According to one version, for a long time Gutseriev did not interfere in the situation in Bin, and when he was summoned to the Central Bank and shown the true state of affairs, he fucked up and deprived his nephew of a share in the family property and kicked him out of the Boards of Directors of the family companies. So the funds that are now going to the Central Bank are only what Gutseriev wanted to part with, it was him that the regulator was dealing with, and it was hard conversations.
Therefore, the Central Bank is now going to sell off assets such as the pre-service vegetable farm, and there is room for maneuver here, because it will be sold at a discount, and one should look carefully at who will sell it and who will buy it. Firesale of bank assets is a very tempting thing, and already now financial-industrial groups that want to get cheap assets are knocking on the doorsteps of the Central Bank and those close to it. It is still unclear what claims the Central Bank will have against Belyaev, but his friend Mints already has to suffer.
2. We are sent strange signals about the events in Ukraine.
Today the Levada Center, controlled by the AP, released a poll according to which less than half of Russians are in favor of supporting the DNR and LNR. Since we don’t have elections, the authorities receive all signals through such polls, it turns out that the AP now has a springboard to phase out support for Donbass. Given the new American sanctions, it is becoming too expensive to keep the conflict even frozen. It is not certain that the process of Donbas reintegration will start now, but probing the public reaction is a step in that direction.
Tougher U.S. sanctions are already hitting the oil industry, and now the U.S. will seek to tear up contracts to supply Russian arms. Today, the first charges may be brought in the U.S. in the case of Russian interference in the election, so our source in the AP, after a severe intoxication over the weekend, was able to report that Kirienko’s office is thinking about how to stop fighting with the West and save face. Hence the reports about the reduction of the contingent in Syria, and the poll on Donbass, which would have been seen without a signal from Staraya Ploshchad.
3. Russian Standard may be sold for debts.
Russian Standard Bank may go under the hammer in order to pay off bondholders. The most egregious banker after Tinkov, of course, banker Rustam Tariko may lose his financial asset. Tariko’s empire has been cracking at the seams for a long time, he has already been forced to get rid of the management company, and now he has decided that it is okay not to pay investors. Now they may try to sell half of the bank, which is pledged to them, the question is, who needs it after such publicity?
The bankruptcy of RS is a natural outcome of ill-considered risk policy and betting on a monoliner bank, which cracked at the seams when the financial situation worsened. According to a source in the bank itself, Tariko is a poor judge of character, and he is mostly surrounded by people who are strange, outgoing, but have little understanding of banking. In general, Tariko has long ago become a problem for investors, who are similarly tormented by the bonds of his alcoholic division, RUST Holding.
Well, we see that you can’t run a business in the style of rock ‘n’ roll, coconut shavings and whores are good only if there are tedious nerds to leave the business on.
4. Russneft was taken away from Gutseriev.
A new twist has appeared in the Central Bank’s fight for the assets of failed banks. Today Vasily Pozdyshev has greatly puzzled all those who were bombarded about Gutseriev’s oil assets and informed that the shares of Russneft have been transferred to the regulator. Moreover, Pozdyshev said that negotiations with other credit institutions where the assets of Bin’s owners are pledged are underway. Apparently, the regulator decided to react to the pressure of law enforcement agencies and telegram channels and decided to fuck around even with pledges in other banks. This is fucked up for Vadik Belyaev, the question is whether the Central Bank will have the resolve to take his diamond company away from VTB.
5. Large Russian businesses are lobbying for the lifting of sanctions.
RBC named the amount of $2 million that Gazprom spends on lobbying its interests in the U.S. and Europe in less than a year. The journalist was not lazy and went to the Senate database and there found data on how much Nord Stream spends to ensure that the project is not shut down because of the tightening of U.S. sanctions. Someone’s invisible hand reached into the publication and poked a finger into the contracts. Either they want to show us that Gazprom is fucked up and spends too much money on lobbyists, but the company has a lot of expenses that are beyond comprehension, Kandelaki alone is worth it.
The point of this publication can only be to show the general public that American sanctions after Russia’s interference in the election have been magically effective, and any projects of even the almighty Gazprom can go wrong. There is a version, which was whispered by our source in the AP. It suggests that leading businessmen are greatly concerned that their activities abroad may be frozen due to sanctions, and those who really have something to lose will make massive leaks to the media through the oligarchic PR agency
The main purpose of such leaks is to show the Pope how advanced Russian business is suffering in order to push for a settlement with the West, the easiest of which is to give up Donbass. I wonder if Western investors will buy Deripaska’s shares in London. Will Gazprom be able to complete the stream? No one, not even the Chinese, much less the Arabs, will go against the US, so the party of compromise that is forming around Kirienko and Dvorkovich has an argument. And if even Miller starts crying, it means that some underhanded movements are going on. The question is what they will materialize into. Because sanctions are a new iron curtain.
Thoughts Not Thoughts
1. When the usual scheme of work is not profitable, banks are forced to find ways to snatch a piece of the pie. And there comes a time for blackmailing their clients.
I think everyone knows how strictly the case with various gray schemes is now. In fact, the Central Bank has given banks carte blanche to block any unjustified transactions, and the banks are acting. They block transactions even for insignificant amounts, and if the client wants to get his funds back, they charge him a price tag of 10-25% of the transfer amount.
And the expectation is that clients will not complain to the regulatory authorities, since even the most honest business in Russia is forced to participate in gray transactions.
2. The crusade against unscrupulous bankers is a good theme for an election campaign. How seriously it will be used in the AP is a topic for discussion. However, the fact that it is being worked on and prepared cannot be ignored. As far as we know, there is no final decision on the issue of hard pressure on shareholders and top management of FC Otkritie and Binbank, but the Ministry of Internal Affairs is working out the ground.
P.S.: we, for example, are 90% sure that there will be jailing, but who and under what article depends on many factors. Mikail Shishkhanov is doing well in this sense, playing the repentant banker, returning assets, “working with the investigation”, but Belyaev and Co. may pay significantly for operations in FC Otkritie and Trust before the introduction of temporary administration.
3. we can’t get past the statements of Central Bank Deputy Chairman Vasily Pozdyshev. One of our favorite characters has said a lot of interesting things.
Let’s start with the global. According to him, the level of problem loans in the Russian banking system is about 10%: “The level of problem loans in our banking system is not so high compared to other countries, about 10%.
Problem loans can be considered in different ways, and Pozdyshev speaks exclusively of non-performing loans, i.e. those for which the possibility of repayment is doubtful. But in general, problem loans are also those that are overdue. In Russia, the volume of such loans is about 11 trillion rubles, or almost a quarter of the loan portfolio, according to S&P calculations. It all depends on how one counts. ACRA, for example, a couple of months ago wrote about the level of problem loans in the system at 12-15%, which is the highest in a decade. And only 50% of these debts are covered by reserves.
So the statements about low level of problem loans are obvious lies, there are problems, and they are big. And this is after the bank has been tightening the screws for the last 2-3 years, cleaning balance sheets, tightening requirements to borrowers. And only 44.5% of borrowers can be considered perfect, i.e. without problems in their credit history. Now let’s add to this, for example, the revival of lending and relaxation of requirements in pursuit of the loan portfolio and we will get a new growth of problem loans.
Temnik
Most regions of the country have come close to default. The sum of the total debts of the constituent entities of the Russian Federation has surely exceeded Br2 trillion.
This has not been news for a long time. Even with a slight downward trend (caused by abundant cheap budget loans in previous years), the state debt of the regions amounted to Br2.23 trillion at the end of the first half of the year. And this debt is distributed very unevenly. There are regions, such as the oil-bearing Yamalo-Nenets Autonomous Okrug, that are reducing their debts, while there are those that are up to their necks in debt. 54 regions have debts exceeding 50% of their annual revenues. In Mordovia the debt is 203.7% of all their revenues. It is very difficult to get out of such a debt hole. The problem is also that 27.7% of the regional state debt falls on commercial loans. And our banks do not mind to make money on the regions and republics, issuing loans at 11.3% per annum (weighted average rate of the Central Bank).
This is a judgment on the regions. And without budget loans at 0.1% the regions will not be able to get out of the debt hole. In a pre-default situation (which has already happened in the Novgorod region) banks are not ready to lend to regions even at 24% per annum.