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Russia's Otkritie Bank gives profit guidance

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Russia's Otkritie Bank gives profit guidance

Otkritie Financial Corp. Bank expects to earn about 20 billion Russian rubles in 2019 and for its profit to grow further to 70 billion rubles in 2020, with return on assets reaching 18%, Izvestia reported Sept. 3, citing bank head Mikhail Zadornov.

The lender, bailed out by the Russian central bank in August 2017, expects to report a profit in 2018, even though it initially planned to just break even under its strategy approved in May, Zadornov noted.

After completing its merger with B&N Bank at the beginning of 2019, Otkritie will strive to have a 5% market share in the retail lending and retail deposit segments. It also wants to become one of top three lenders for servicing small and medium-sized businesses in 2020.

The executive added that the lender still plans to sell up to 20% of its shares in 2021, but an option to attract a strategic investor is currently not being considered due to sanctions imposed on Russia.

Zadornov also said that there are currently no plans to sell Rosgosstrakh Insurance Co. (PJSC), taken over by the Russian central bank together with Otkritie, although a stake could be sold to a buyer willing to invest into the insurer.

Otkritie Bank's former owner Otkritie Holding JSC reduced the debt it owes to the lender and its units to between 320 billion rubles and 350 billion rubles from 550 billion rubles at the beginning of 2018, and negotiations are carried out to take over some of Otkritie Holding's assets to reduce the debt further. The bank already signed an agreement to acquire Otkritie Holding's asset management unit, which is worth 1.2 billion rubles, and is also in talks to take over Baltic Leasing OJSC and get the rights to Otkritie Group trademarks, Zadornov was cited as saying.

As of Sept. 3, US$1 was equivalent to 68.08 Russian rubles.