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Report: Bailed-out Otkritie on track to beat 2019 earnings target, CEO says


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Report: Bailed-out Otkritie on track to beat 2019 earnings target, CEO says

Otkritie Financial Corp. Bank, bailed out by the Russian central bank in 2017 and currently controlled by the regulator, expects its 2019 net profit will significantly exceed its target of 28 billion rubles if the economic situation does not deteriorate by year-end, RBC reported Aug. 13, citing the lender's CEO Mikhail Zadornov.

Otkritie's half-year group net profit, calculated under international financial reporting standards, amounted to 33.4 billion rubles, up from 1.8 billion rubles one year ago, with return on equity reaching 16.9%, the lender said Aug. 13 on its website. Zadornov told RBC the half-year earnings are around two times higher than initial targets for the period in question, with around 30% of the group profit coming from Otkritie's unit Rosgosstrakh Insurance Co. (PJSC), pension fund NPF Otkritie and Baltic Leasing JSC.

The executive also said that Otkritie continues preparations for the sale of its 20% stake on the market, which the central bank plans to do in mid-2021. Otkritie has already held first meetings with investors and is working to reach its three-year strategy targets.

The lender has not yet discussed potential sale options with the central bank, but a stock exchange offering would likely be "the most correct way" to sell the lender's first big stake on the market, Zadornov was cited as saying.

The official also noted that Otkritie and Russia's bad bank National Bank Trust PJSC managed to retrieve around 300 billion rubles so far from the former owners of Otkritie and other Russian big lenders bailed out by the central bank in 2017.

As of Aug. 12, US$1 was equivalent to 65.58 Russian rubles.