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Reports: Otkritie Financial Corp. Bank in a hurry to off-load NPL portfolio

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Reports: Otkritie Financial Corp. Bank in a hurry to off-load NPL portfolio

Otkritie Financial Corp. Bank put up for sale around 35 billion Russian rubles worth of overdue retail loans in the largest nonperforming loan tender on the Russian market so far in 2017, Kommersant reported Aug. 9.

The portfolio includes around 79,000 loan contracts and is divided into 114 small lots. Otkritie announced the tender on its website July 27, and potential buyers were given only five working days to collect necessary documents, assess the portfolio and submit bids to participate in the tender, the newspaper said.

In the second round of the sale procedure, Otkritie will compare 15 offers with the best prices, and the results of the tender will be known at the end of August, Vedomosti said Aug. 9, citing Otkritie's head of collections, Dmitry Kim.

The division of the portfolio into small lots and the short term set for potential buyers to file their applications to participate in the tender suggest that the bank, which has recently been subject to negative information attacks, wants to quickly sell the nonperforming loans in order to dissolve loan loss provisions and get liquidity, Kommersant said. Meanwhile, Vedomosti cited Kim as saying that selling the portfolio in small lots allows the lender to improve the efficiency of the sales process.

The negative information attacks on Otkritie, which is Russia's largest private bank by assets, started at the end of July, prompting Vadim Belyaev, the main shareholder of the lender's parent, Otkritie Holding JSC, to take over operational management and assume the post of chairman of the management board at the latter company, Kommersant said Aug. 5. In addition, corporate clients recently withdrew over 100 billion rubles from the lender, while in early July, Russia's Analytical Credit Rating Agency assigned Otkritie Bank a BBB-(RU) rating, which does not allow it to attract funds from the federal budget and nonstate pension funds, the newspaper noted.

On Aug. 5, the bank experienced technical problems due to a damaged fiber optic cable, with 1.5% of its customers being affected by the issue, but it managed to restore its systems shortly after, Kommersant said.

As of Aug. 8, US$1 was equivalent to 59.89 Russian rubles.