Russian banks in Ukraine in terms of political confrontation

0
1954

Growing conflict between Ukraine and Russia is certainly reflected in the economy of both countries. Banking sector is no exception. In Ukraine, there are a number of banks with Russian capital, occupying an important position in its banking system.

ukrainian russian conflict in banking sphere

 

A list of such banks and their owners is provided below. 

 

Bank Bank` owner

Alfa-Bank 

ABH Ukraine Limited (Cyprus) 

Russian Standard 

Bank Group "Russian Standard" (Russia) 

BM Bank 

Russian Government (through the group VTB) 

VTB Bank 

Government of the Russian Federation 

Petrocommerz Ukraine 

IFD Kapital (Lukoil) 

Prominvestbank 

Russian Government through Vnesheconombank 

Sberbank of Russia 

Russian Government 

VS Bank (Volksbank) 

Russian Government (through Sberbank Europe AG) 

Bank Trust 

National Bank "Trust" (Russia) 

ENERGOBANK 

Roylance Services Ltd. (Cyprus) 

According to the official sites*

As you can see, at the beginning of April 2014, there are ten Russian banks. From the total number of 180 institutions not so much. However, Russian banks occupy a lot of weight in the banking system of Ukraine – in terms of assets Prominvestbank takes 7th place, Sberbank – 8th, Alfa-Bank – 11th, VTB Bank – 13th. Total NBU classification consists of the largest 15 banks, a quarter of which have Russian capital.

 

It is worth noting that VS Bank (formerly Volksbank and belonging to the Austrian group of the same name) belongs today to Sberbank of Russia but still works as an independent institution. The fact that the bank is actually still working separately from Sberbank confirmed by occasion in late February when Ukrainian subsidiary of Sberbank announced the discontinuation of all new lending to customers, while VS Bank continued to provide loans to new borrowers.

russian banks in Ukraine, perspectives, crisis, political confrontation, economics, Ukraine, business

Russian state-owned banks in the list above are: VTB and Sberbank of Russia Prominvestbank. These banks since late February 20014, the announced stop lending new customers.

 

Withdrawal of such major players from the market greatly reduces the amount of new loans and an more badly weakens the economy of Ukrainian state.

 

We can`t say so about private banks: they continue to lend and actively serve customers. It should be noted that Russian banks do not experience serious problems with the issuance of deposits, while many Ukrainian banks are frequently betray their depositors.

 

Continuing the theme of the owners: the profit from the banks is proceeding to them, respectively, to Russia, where the part of it is allocated (and in the case of state-owned banks is 100%) into the federal budget.

 

And here it is necessary to look at the table with the owners of the banks. Yes, beneficiaries are citizens or companies of Russia, but not so simple. Alfa-Bank actually was never Russian de jure – 80% of its shares are owned by a Cypriot company. And most recently it was decided and the remaining 20% stake to reissue to ABH Ukraine Limited. What is Cyprus really know everybody, and why companies are registering there too. And now let's ask ourselves: and how many percent of the income of Alfa-Bank (Ukraine) reaches the Russian budget. I think very few. Perhaps nothing.

 

The situation is similar in the Bank "Trust". The ownership structure of "NB" Trust "can be found on the website of the bank. Most popular jurisdiction in this scheme are Cyprus, the Cayman Islands, the British Virgin Islands and the state of Delaware ("offshore" as part of the U.S.). I think taxes from the activities of the bank whaich are proceeding to the federal budget similar to Alfa Bank`s ones.

 

Without offshore, namely Bermuda company, it was not go without in the ownership in structure of Russian Standard Bank. Cyprus companies are also in the chain of bank owners of 'Petrocommerz-Ukraine' . A Cyprus company owns Energobank of Russian citizen, Anatoly Danilitsky.

 

Of course, in any case can not be said that such ownership structure was made solely for the purpose of tax evasion: the owners of the banks may simply want to secure their business by registering it as a foreign company.

 

So again the conclusion is not in favor of state-owned banks whose profit goes entirely to the budget of the Russian Federation, unlike the private banks.

 

However, we have to see what is there anything to depart? 

Bank

 Financial result for 2013, UAH

Sberbank of Russia  573 million profit 
VS Bank (formerly Volksbank)  + 65 million
Russian Standard Bank  + 57 million
Alfa-Bank  + 13 million
Petrocommerz Ukraine  +7 million
Energobank + 2.4 million
Bank "Trust"  + 0.5 million
BM Bank

174 million loss

VTB Bank – 194 million
Prominvestbank – 2.575 billion

According to NBU*

 

As you can see, a difficult situation in the banking sector is not spared banks with Russian capital too: major successes can boast only Sberbank, while Prominvestbank was the most unprofitable from all banks in Ukraine. Notable losses suffered VTB Bank and BM Bank. The residual institutions have worked in 2013 actually "at zero": for retail bank unserious to deem a decent profit in equivalent of 7.8 million UAH (VS Bank and Russian Standard Bank) or smaller number.

russian banks in Ukraine, perspectives, crisis, political confrontation, economics, Ukraine

However, profit does not mean that it will come to the bank's shareholders. It can remain in the facility for future development.

 

The nine banks are just "institutions with Russian capital," and not "Russian banks." All of them are registered in Ukraine and Ukrainian residents are run in accordance with our laws and pay taxes in the budget of Ukraine. 

Bank

Payments to the budget of Ukraine for 2013, the hryvnia

Sberbank of Russia

65 million

VTB Bank

33 million

Alfa-Bank

33 million

Russian Standard Bank

16 million

VS Bank (formerly Volksbank)

15 million

Petrocommerz Ukraine

0.4 million

Bank "Trust"

0.2 million

BM Bank

0

Prominvestbank

0

Energobank

0

Over the past year, these ten banks transfered in the state budget of Ukraine more than 162 million hryvnias. Of course, it's not much, in total all Ukrainian banks have paid taxes of more than 1.6 billion hryvnia, but such receipts are not much superfluous for us.

 

At the same time these banks set Ukrainians to work and upon the whole these banks employ tens of thousands of our compatriots. Of course, there are the Russian workers either and basically it's the top management of the bank, but there are not so much of them. How much these banks spent in 2013 on salaries, maintenance departments, utilities is also important to consider. 

Bank

Administrative and other operating expenses for 2013, UAH

Prominvestbank

1,419 billion

Alfa-bank

1,410 billion

VTB Bank

1,133 billion

Sberbank of Russia

1,262 billion

Russian Standard Bank 

527 million

BM Bank

143 million

Energobank

132 million

VS Bank (formerly Volksbank)

120 million

Petrocommerz Ukraine 

72 million

Bank "Trust" 

57 million

 

The money that banks attract through deposits, issuing bonds and from their parent institutions, they are directing to lending of businesses and citizens living in Ukraine. Sure, they may re-lend to businesses with Russian owners, but among the most customers of these institutions is Ukrainian business and the public mostly.

 

Instead of conclusion

It can be argued that in terms of the boycott, consumer goods, made ​​in Russia and banks with Russian capital can not be putted in one line.

 

If, for example, you refuse to buy Russian chocolate in favor of Ukrainian, you give job to Ukrainian companies and its workers and does not give money to the Russians. But with sphere of banks situation is not so easy.

 

Of course, everyone must make their own choice. But the bank for deposit should be chosen primarily based on its stability, quality of service, and not on the basis of the jurisdiction of the final beneficiaries.

 

Choosing a bank to issue the credit you must look at the real interest rate on the loan, consider how much will have to overpay. However, will be unwise to take out a loan in the Ukrainian bank and pay 50% of the loan amount, if, say, to the Russian overpayment will be 30%?

 

Banks have to compete for customers with the most advantageous offers, good service, innovative products and not with the passport of the owner.

 

You can also read the recent material about reaction of Russian banks on the third package of sanctions from EU and USA.

LEAVE A REPLY

Please enter your comment!
Please enter your name here