Bank Otkritie May Rake in Net Profit of $295mn in 2019

Russia’s Otkritie Bank bailed out as part of a series of central bank interventions last year, expects to report a net profit of 20 billion rubles $295.1 million, which is much higher than expected, the bank’s board chairman Mikhail Zadornov said in an interview with the Izvestya newspaper.

“This year, according to the business plan, we have to break even, but for the first half of the year the bank earned around 6 billion rubles ($88.53 million) in net profit, so we are sure that there will be profit by the end of the year,” Zadornov said.

“If, of course, we exclude some external shocks, which will affect not only our bank but also the country’s economy in general. In 2019, we plan to earn about 20 billion rubles in profit. In 2020, the profit from the banking business alone should amount to 70 billion rubles ($1.03 billion), this is our strategic goal,” Zadornov said, while adding that the bank’s capital by the beginning of next year would amount to 320-350 billion rubles ($4.7-5.1 billion).

According to the chairman, in 2020 the bank plans to achieve profitability of assets of 18%, and in 2021 – to sell 15-20% of its shares.

“Right now it is difficult to imagine that large Russian or foreign investors will come to the banking market, primarily due to uncertainty and sanctions. That is why we do not consider selling to any strategic investors yet. On the other hand, I do not rule out that one of our partners can buy a stake in Otkritie,” he clarified.

The state bailout of Otkritie, one of the biggest such moves in Russian history, was announced in August 2017. In late 2017, the Russian Central Bank allocated 456.2 billion rubles ($6.7 billion) for additional capitalization of the Otkritie group. A substantial part – 189.1 billion rubles ($2.7 billion) – went on closing the huge gap in Otkritie’s capital.