Sovcombank
FormerlyBuycombank
TypePublic joint stock company
IndustryBanking
Founded1990
Headquarters
Kostroma
,
Russia
Key people
  • Matvey Yozhikov
  • Dmitry Gusev
ProductsFinancial services
RUB 39.2 billion (2020)[1]
Total assetsRUB 1483.36 billion (2020)[1]
Total equityRUB 188.259 billion (2020)[1]
OwnerSovco Capital Partners (Russia)
Websitesovcombank.ru/en/about/info
Sovcombank building, Moscow
Sovcombank office (Lenin Avenue in Vyborg)

Sovcombank (Public Joint-Stock Company "Sovcombank", Russian: Совкомбанк) is a Russian privately owned universal bank included in the list of 13 systemically important Russian banks.[2] In terms of assets, it ranks 9th among Russian banks (1,483 billion rubles).[3]

From 1990 its initial name was Buycombank (after former headquarters town Buy in Kostroma region) before been bought and rebranded into Sovcombank and his partners in February 2003.[4]

The main owner of Sovcombank (86.5%) is the Russia-based company JSC Sovco Capital Partners, owned by private Russian shareholders, notably (as of February 2023) the Russian oligarch Matvey Yozhikov owns 90% of Sovco Capital Partners. Minority shareholders of Sovcombank include Public Investment Fund of Saudi Arabia (3.3%), Russia-China Investment Fund (2.0%) and Russia-Japan Investment Fund (1.3%)[5][6] After operating within Netherlands and Luxembourg jurisdiction, from September 2021 the holding company of Russian shareholders of Sovcombank was reregistered in special administrative region of Oktyabrsky island of Kaliningrad oblast in Russia.[7][8]

The bank is subject to Western sanctions since February 24, 2022 in response to Russia's invasion of Ukraine.[9]

History

Sovcombank was registered on November 1, 1990, in the Buy town, Kostroma Oblast. It was originally known as Buykombank.[10]

In 2002, Buykombank was acquired by Sergey Khotimsky and Mikhail and Vasily Klyukin brothers. In February 2003 the bank was renamed Sovcombank ("Modern Commercial Bank"). The head office was relocated to Kostroma.[10][11]

In September 2007, the shareholder of Sovcombank became the international investment company from the Netherlands TBIC Financial Services BV (TBIF).[12] As a result of this transaction, Sovcombank turned out to be the only owner of TBIF assets in Russia represented by the Siberian Arch Credit Network (about a thousand salespies). Under the terms of the transaction, the Kardan TBIF subsidiary received 50% of the shares in Sovcombank, making 100% of the Arch and about $65 million. Khotimsky and partners issued their shares through the Netherlands Sovco Capital Partners.

In May 2012, TBIF sold its share to other Sovkombank shareholders,[13] having received €123 million and earned €59 million.

At the end of 2015, Pavel Fuks sold his part (21.83%) in Sovcombank, which was estimated at $80 million.[10]

In early 2019, another additional issue was held, as a result of which the authorized capital of Sovcombank increased by ₽ 100 million to ₽ 1.97 billion. Shares were redeemed by Russian Direct Investment Fund and Ayar International Investment Company (Saudi Arabia), which were already shareholders, as well as new investors — Bahrain Mumtalakat Holding and the Russian-Japanese investment fund.[14] In 2019, bank took part in UN initiative for responsible financial activities.[15]

In 2020, Sovcombank started preparations for the IPO, its shareholders approved listing on the Moscow Stock Exchange. Goldman Sachs, JP Morgan and Morgan Stanley were chosen as the placement managers.

In the 2020 Bank of Russia included Sovcombank into a list of systemically significant banks.[16][17]

In 2021 Sovcombank closed a deal to buy Vostochny Bank from its key shareholders - Baring Vostok Fund, Finvision Company and Sherzod Yusupov.[18] In December 2021 Sovcombank signed a binding agreement on the purchase of an insurance division “CiV Life” from HDI International AG, affiliate of the Talanx group. The deal was previewed to be closed in the first quarter of 2022.[19]

In February 2022 Sovcombank became the first Russian bank launching 4-days workweek.[20]

In February 2022 Sovcombank acquired 31% of Vitabank for further use of its licence to develop payment services. Another 54% of shares of Vitabank were bought by Kirill Sokolov, Sovcombank's ex-deputy chairman of the board. The stake of "Kirov Leningradsky grain processing plant" has been subsequently decreased from 93,76% to 8,76%.[21]

In December 2023, after repeated postponements, Sovcombank announced an IPO on the Moscow Exchange. As a result of the placement of shares, it is planned to raise 10 billion rubles. The share price will be 10.5-11.5 rubles per share, which corresponds to the bank’s capitalization of 200-219 billion rubles. This is the bank's first IPO in Russia since 2015 and the first IPO of a company under sanctions.[22]

Sanctions

On February 24, 2022, in response to Russia's invasion of Ukraine, U.S. President Joe Biden announced additional economic sanctions against Russian individuals, companies and financial institutions, including Sovcombank and its subsidiaries.[23][24] These sanctions freeze any of Sovcombank assets touching the U.S financial system and prohibit U.S. persons from dealing with the bank.[24] As result, plastic cards issued by Sovcombank will remain active in Russia only, and any foreign exchange transactions will be unavailable to its clients.[25]

Key subsidiaries

Sovcombank Insurance

Sovcombank Insurance (until 2020 — Liberty Insuranse (Russia), Russian: Либерти Страхование). This company has been operating in the Russian insurance market since 1993 under the brands "Klass" (Russian: Класс) and "KIT Finance Insurance" (Russian: КИТ Финанс страхование).[26] Liberty Insurance Group bought this company in 2013 and sold it to Sovcombank in 2020.

Sovcombank Life

Sovcombank Life (until 2021 — MetLife (Russia), Russian: МетЛайф). The company has been operating in the Russian life insurance market since 1994 under the brands AIG, Alico and Metlife.[27] Sovcombank bought MetLife (Russia) in 2020 and renamed it in 2021.[28]

Sovcombank Asset Management

Sovcombank Asset Management (until 2021 — Vostochny Capital Management Company, Russian: УК "Восточный Капитал"). Vostochny Capital Management Company was established in 2018 as a subsidiary of Vostochny Bank.[29] At the end of May 2021, Sovcombank closed a deal to acquire 100% of Vostochny Bank (including Vostochny Capital Management Company).[30]

Sovcombank Leasing

Sovcombank Leasing (until 2020 — Sollers-Finance, Russian: Соллерс-Финанс). The leasing company Sollers-Finance was established in 2008 as a subsidiary of Sollers OJSC.[31][32] Since 2010 Sovcombank LLC become the co-owner of the company and in 2019 its become the sole owner of the company.[33] In 2020, Sollers-Finance was renamed Sovcombank Leasing.[32]

Sovcombank Factoring

Sovcombank Factoring (until 2018 — R.E.Factoring, Russian: Р.Е. Факторинг). The company has been operating in the Russian factoring market since 2013 under the brand Russian: Р.Е. Факторинг.[34] Sovcombank bought R.E.Factoring in 2018 and renamed it in 2019. Sovcombank also bought the "National Factoring Company" factoring group from Uralsib Bank in 2021 and merged it with Sovcombank Factoring.[35]

Sovcombank Technologies

Sovcombank Technologies is an IT company created by Sovcombank in 2021 to develop ecosystem for the Halva installment card project.[36] The company is also involved in innovative developments using biometrics, chat bots, and conversational artificial intelligence.[37] In January 2022, Sovcombank organized a co-working space for back office employees and Sovcombank Technologies. The base for coworking was a five-star hotel in Turkey on the Mediterranean coast.[38]

Contribution to global initiatives

Sovcombank pursues a policy of sustainable development and takes care of the social and environmental (ESG) aspects of its activities.[39] Sovcombank participates in the United Nations Environment Program Finance Initiative (UNEP FI, since 2019), it has signed the Principles for Responsible Investment.[40] In the same year, Sovcombank became a member of the UN Global Compact, a UN initiative aimed at promoting the social responsibility of business.[41] Sovcombank was the first among Russian banks to support the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD) and has committed to apply the recommendations to make the bank's ESG reporting even more transparent.[42][43]

Ratings

Fitch Ratings downgrade rating to "B" in March 2022 and then withdrew.[44]

Standard & Poor's affirmed the "BB" foreign currency long terms credit rating of Sovcombank on January 15, 2021, outlook was revised to "positive" from "stable".[45]

Moody's assigned "Ba1" rating to Sovcombank's proposed LPNs in January 2021.[46]

ACRA upgraded Sovcombank to "AA-(RU)" and changed outlook to "stable" in April 2021.[47]

Expert RA affirm rating "ruAA" and outlook "stable" in February 2022.[48]

References

  1. 1 2 3 "IFRS Results 2020 (Eng)". Retrieved 6 April 2021.
  2. ↑ "List of systemically important credit institutions approved". Central Bank of Russia. 11 October 2021.
  3. ↑ "ИНТЕРФАКС-100. Банки России. Основные показатели деятельности (тыс. рублей) - 2020 г." finmarket.ru (in Russian). Retrieved 6 April 2021.
  4. ↑ "General Information". sovcombank.ru. Retrieved 4 August 2021.
  5. ↑ "Лица, под контролем либо значительным влиянием которых находится кредитная организация" [Persons who control or have significant influence over the credit institutions] (PDF) (in Russian). Банк России. 8 June 2020. Archived from the original (PDF) on 20 April 2021.
  6. ↑ "Sovcombank announces appointment of two new Independent Non-Executive Directors". Sovcombank. 3 September 2021.
  7. ↑ "В Калининградском офшоре зарегистрировалась структура Совкомбанка" (in Russian). РБК. 3 September 2021.
  8. ↑ "A holding structure of Sovcombank is registered in the SAR on Oktyabrsky Island (Kaliningrad Region)". Kaliningrad Region Development Corporation. 3 September 2021. Retrieved 26 September 2021.
  9. ↑ "Russia's Sovcombank to challenge sanctions, starting with Japan -source". Reuters. 3 April 2023.
  10. 1 2 3 Дмитрий Яковенко, Forbes, 29 марта 2018.
  11. ↑ "Лидеры роста - Акции фондового рынка". РБК Инвестиции. Retrieved 7 December 2023.
  12. ↑ "Голландцы обошли Москву" (Газета "Коммерсантъ" ed.). 13 June 2007. p. 15.
  13. ↑ "Сделка по продаже 50-процентной доли холдинга Kardan N. V. в Совкомбанке будет закрыта до конца мая | Банки.ру". www.banki.ru. Retrieved 13 November 2017.
  14. ↑ Александра Астапенко (18 January 2019). "Совкомбанк нашел новых инвесторов. Его акции планируют купить суверенный фонд Бахрейна и Российско-японский инвестиционный фонд" [Sovcombank has found new investors. Its shares are planned to be bought by the sovereign wealth fund of Bahrain and the Russian-Japanese Investment Fund]. «Ведомости». Retrieved 12 October 2020.
  15. ↑ Вледимир Миронов (25 September 2019). "Банки ответят за устойчивое развитие На днях первый российский банк стал членом международной группы финансовых организаций, подписавших "Принципы ответственной банковской деятельности" Финансовой инициативы Программы ООН по окружающей среде (UNEP FI)". Finversia.ru (финансовый портал). Retrieved 14 October 2020.
  16. ↑ "List of systemically important credit institutions approved". Central Bank of Russia. 29 October 2020. Retrieved 31 October 2021.
  17. ↑ "ЦБ добавил Совкомбанк в список системно значимых кредитных организаций Всего в перечень входят 12 банков, на долю которых приходится около 74% совокупных активов российского банковского сектора". ТАСС. 29 October 2020. Retrieved 3 November 2020.
  18. ↑ Kolodyazhnyy, Anton; Fabrichnaya, Elena (25 March 2021). "Russia's Sovcombank buys Vostochny from U.S. investor Calvey's firm, others". Reuters. Retrieved 31 October 2021.
  19. ↑ "Совкомбанк стал собственником страховой компании СиВ Лайф" [Sovcombank became the owner of the insurance company CiV Life] (in Russian). Интерфакс. 27 December 2021.
  20. ↑ "Совкомбанк стал первым российским банком, начавшим эксперимент с 4-дневной рабочей неделей" (in Russian). Esquire (Россия). 3 February 2022.
  21. ↑ "Совкомбанк получил 31% Витабанка" (in Russian). Интерфакс. 22 February 2022.
  22. ↑ "Книга заявок в рамках IPO Совкомбанка переподписана втрое". Interfax (in Russian). 5 December 2023.
  23. ↑ "U.S. Treasury Announces Unprecedented & Expansive Sanctions Against Russia, Imposing Swift and Severe Economic Costs". 24 February 2022.
  24. 1 2 "FACT SHEET: Joined by Allies and Partners, the United States Imposes Devastating Costs on Russia". The White House. 24 February 2022. Retrieved 25 February 2022.
  25. ↑ "Plastic cards issued by sanctioned Sovcombank will remain operable in Russia but FX transactions will become unavailable to clients". Interfax. 24 February 2022. Retrieved 25 February 2022.
  26. ↑ Рожков, Алексей (27 November 2012). ""У нас хорошо получается покупать компании", — Дэвид Лонг, президент и генеральный директор группы Liberty Mutual" [“We are good at buying companies.” — David Long, President and CEO of Liberty Mutual Group] (in Russian). Vedomosti. Retrieved 11 February 2022.
  27. ↑ "История изменений названия компании Алико (Метлайф Алико, MetLife Alico) в реестре ФССН". Страхование сегодня. Retrieved 7 December 2023.
  28. ↑ Komal, Nadeem (19 January 2021). "Sovcombank closes acquisition of MetLife's Russian subsidiary". S&P Global. Banking,Insurance. Retrieved 14 February 2022.
  29. ↑ "Sovcombank bought MC Vostochny Capital from Modulbank for asset management business". HIGHTECH.EDU.EU. 2 June 2021. Retrieved 15 February 2022.
  30. ↑ "Совкомбанк купил "дочку" Модульбанка для развития бизнеса по управлению активами" [Sovcombank bought a subsidiary of Modulbank to develop asset management business]. Banki.ru (in Russian). 31 May 2021. Retrieved 15 February 2022.
  31. ↑ "SOLLERS-FINANCE". Retrieved 7 December 2023.
  32. 1 2 "Чистая прибыль "Совкомбанк Лизинг" в I квартале выросла в 2,6 раза - до 123,6 млн рублей" [Net profit of Sovcombank Leasing in the first quarter increased 2.6 times - up to 123.6 million rubles] (in Russian). TASS. 6 May 2021. Retrieved 15 February 2022.
  33. ↑ "Совкомбанк стал единственным владельцем лизинговой компании "Соллерс-финанс"" [Sovcombank became the sole owner of the Sollers-Finance leasing company] (in Russian). TASS. 24 December 2019. Retrieved 15 February 2022.
  34. ↑ "Совком Факторинг - специализированная факторинговая компания СОВКОМБАНКА (in Russian)". Retrieved 7 December 2023.
  35. ↑ "The National Factoring Company (NFC) has joined the Sovcombank Group". AK&M. 28 July 2021. Retrieved 14 February 2022.
  36. ↑ "Sovcombank will start issuing Halva cards of the UnionPay payment system in the spring of 2022". AK&M. 8 February 2022. Retrieved 14 February 2022.
  37. ↑ Кречетова, Ангелина (7 April 2021). "Зачем Совкомбанк создал технологическую "дочку"" [Why Sovcombank created a technological subsidiary]. Frank Media (in Russian). Retrieved 14 February 2022.
  38. ↑ "Sovcombank opens coworking in Turkey for employees on "remote"". АК&M. 3 February 2022. Retrieved 14 February 2022.
  39. ↑ "SUSTAINABILITY REPORT" (pdf). Sovcombank. 2020. Retrieved 22 February 2022.
  40. ↑ "PRB Reporting and Self-Assessment Form of PJSC Sovcombank" (pdf). Sovcombank. Retrieved 22 February 2022.
  41. ↑ "Our Participants". UN Global Compact. UN. 1 August 2019. p. 172. Retrieved 15 February 2022.
  42. ↑ "Task Force on Climate Related Financial Disclosures Supprorters". Task Force on Climate Related Financial Disclosures. November 2021. Retrieved 22 February 2022.
  43. ↑ "Sovcombank announces support for TCFD recommendations". Russia. AK&M. 15 November 2021. Retrieved 22 February 2022.
  44. ↑ Ratings fitchratings.com
  45. ↑ "S&P Global Ratings revised outlook on Sovcombank to positive and affirmed at "BB" (Foreign Currency LT) credit rating". 18 January 2021.
  46. ↑ "Sovcombank PJSC". Moody's. 3 August 2021. Retrieved 1 November 2021.
  47. ↑ "Public Joint-Stock Company "Sovcombank"". ACRA. 19 April 2021. Retrieved 1 November 2021.
  48. ↑ "Public Joint-Stock Company "Sovcombank"". Expert RA (in Russian). 9 February 2022. Retrieved 10 February 2022.
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