New Management Board of Otkritie FC Bank Elected 22 December 2017
The Supervisory Board of Otkritie FC Bank has elected a new Management Board of the Bank.
Mikhail Zadornov has been elected the Board’s Chairman, effective from 01 January 2018. New members of the Board are Veniamin Polyantsev, Nadiya Cherkasova (both from 01 January), Alexander Sokolov (from 21 December 2017), and Sergey Rusanov (from 05 February). Alexander Sokolov has been appointed to serve as acting Chairman of the Board until Mikhail Zadornov takes office.
Electing new members to the Bank’s permanent management bodies is another step by the Bank of Russia to improve the financial stability of Otkritie FC Bank.
Mikhail Zadornov, Chairman of Otkritie FC Bank’s Managing Board:
The new Supervisory and Management Boards of Otkritie FC Bank have been formed. This means that the Bank has gone through the two most important stages of its financial rehabilitation via the Banking Sector Consolidation Fund.
Firstly. The size of the balance sheet, net assets and the amount of additional reserves have been assessed. As a result of this first stage, the Bank’s capital has been brought down to 1 rouble. All of the former shareholders' stakes, subordinated loans and Deposit Insurance Agency funds were written off. Further, Otkritie’s capital was increased through the Consolidation Fund. The Bank’s capital has been brought to a level sufficient to maintain the statutory ratios to be in force as of 1 January 2018 in view of the upcoming higher levels of capital requirements for systemically important banking institutions. Therefore, Otkritie is already in compliance with all the requirements (including in relation to the buffers imposed on systemically important banks). This alone is a significant indicator for the Bank’s customers. Importantly, due to the new mechanism the financial rehabilitation procedure that was expected to take 6-8 months has been completed in 3.5 months.
The faster these processes are completed the better the business will be preserved, and the faster the bank can resume operating as usual.
Secondly. Otkritie Bank is fully ready to carry on its operations on the corporate and retail banking markets. Otkritie’s newly formed Board will take up its duties from 1 January 2018. The Central Bank’s temporary administration will step down. The Bank will be run by its new management who will actively engage with the business of the Bank and its subsidiaries, including, first of all, Rosgosstrakh and Otkritie Group’s pension funds. Notably, a meeting of Rosgosstrakh board of directors was held on 21 December. During the meeting, the 2018 budget, organizational structure, the management board matters and its targets for the upcoming year were discussed.
Thirdly. The priorities set for Otkritie’s Management Board are as follows:
· To form a new organizational structure, both for the head office and the regional network and to strengthen the Bank’s workforce. We are hoping to carry out these tasks in the next two weeks.
· To have a 2018-2020 business plan of the Bank and its subsidiaries developed and approved by the Board of Directors.
· To prepare the business and operational models for 2018-2020 - this is the number one task that our shareholder is expecting us to tackle.
· Strategy for managing non-core assets and client relationships: meeting with customers and making the Bank’s position clear to them. This is also our top priority.