The head of the Russian Capital bank, Mikhail Kuzovlev, believes that Zadornov is now the best personnel solution for a bank like Otkritie. “Mikhail Mikhailovich has extensive experience in integration. He knows how to work both alone and assemble a strong team. VTB24 has already essentially digested its integration. This experience will be very useful at Otkritie, which was also actively involved in mergers and acquisitions and is represented in all major sectors of the financial market,” said the banker, who previously worked with Mikhail Zadornov.

At the end of August, the Kommersant newspaper wrote, citing sources close to the bank and the VTB group, that the Central Bank invited the current head of VTB24 and former Minister of Finance Mikhail Zadornov to head FC Otkritie. The publication noted that the regulator views Zadornov as an anti-crisis manager. Then the VTB press service denied Zadornov’s transition. “We do not comment on rumors. Mikhail Zadornov is not leaving VTB Group,” the bank said.

Formally, Mikhail Zadornov holds the position of president - chairman of the board of VTB24 bank. On August 28, the VTB Supervisory Board nominated his candidacy for election as a member of the VTB board and decided to send documents approving his candidacy to the Central Bank.

Investor of last resort

The Bank of Russia announced the introduction of a temporary administration at FC Otkritie Bank and the beginning of the implementation of measures aimed at increasing its financial stability. The reorganization of a bank from the top 10 Russian banks became the largest in modern history banking sector of the country and the first in terms of the mechanism of direct participation of the Central Bank in the capital of the bank through the Banking Sector Capitalization Fund (BCBS). Among them, First Deputy Chairman of the Central Bank Dmitry Tulin named the bank’s attempt to acquire the largest player in the unprofitable OSAGO market - the Rosgosstrakh company. The second reason, according to Deputy Chairman of the Bank of Russia Vasily Pozdyshev, was the “not entirely successful reorganization” of Trust Bank.

It will take place in two stages, which will take a total of six to eight months, said then First Deputy Chairman of the Bank of Russia Dmitry Tulin. During the implementation of both stages of financial recovery, management of the bank is completely transferred to the Central Bank, the regulator reported.

With the beginning of the implementation of the first stage, the powers of the board are suspended, the supervisory board and the meeting of shareholders function in a special regime, that is, their decisions come into force after agreement with the temporary administration. At the second stage (three to five months), according to him, shareholders will be deprived of even limited powers, but only until the work of the temporary administration is completed. Then these rights will be returned to them, but given that the Central Bank owns 75% of the shares, they still will not have control. New bank management bodies will be formed at the end of the second stage.

When announcing the bank’s reorganization, the Central Bank emphasized that “the implementation of measures to increase the financial stability of the bank is carried out in cooperation with the current owners and managers of the bank.” FC Otkritie stated that “the current owners and management are openly and constructively cooperating with the Bank of Russia and will also cooperate with the interim administration.”

“The powers of the members of the bank’s board of directors were suspended due to the appointment of a temporary administration; the bank’s supervisory board is working with the same composition. Chairman of the Board Evgeny Dankevich is on leave due to personal reasons,” the press service of FC Otkritie told RBC in response to a request about whether members of the board and supervisory board continue to work at the bank.​

What is Mikhail Zadornov famous for?

In 1984 he graduated from the Moscow Institute of National Economy. Plekhanov, defended his Ph.D. thesis in 1988.

After graduate school, he worked at the Institute of Economics of the USSR Academy of Sciences. In 1990, he joined the State Commission for Economic Reform of the Council of Ministers of the RSFSR under the leadership of Grigory Yavlinsky, and became one of the authors of the “500 days” economic program. In 1993, he took part in the formation of the Yabloko movement, and later ran for deputy from the Yabloko party. He was elected to the State Duma of four convocations, and for a long time headed the budget committee of the lower house.

In 1997-1999 - Minister of Finance of Russia, in this post he participated in the decision to default in August 1998. Then he held the positions of First Deputy Prime Minister, Special Representative of the President of Russia for relations with international financial organizations.

Since 2005, he has been president and chairman of the board of VTB24 bank; until May 31, 2017, he was a member of the board of VTB. At the end of August, almost three months later, the bank’s supervisory board approved his return to the VTB board, but the Central Bank has still not agreed on this decision.

An experienced person with solid work experience in the financial and banking sectors. Here are some fragments from his biography. From November 1997 to May 1999 - Minister of Finance Russian Federation. In 1997, he joined the board of directors of Sberbank, and in May 1998, he became deputy chairman of the supervisory board of Sberbank.

The longest episode of the biography (2002-2017) is the president - chairman of the board of VTB24 bank, a subsidiary of Vneshtorgbank (VTB), which specialized in retail business. At the beginning of this year, VTB24 and VTB merged, and Zadornov moved to the chair of the head of Otkritie Bank.

As an experienced person, Mikhail Mikhailovich in his answers sometimes gives rather “rounded” formulations designed to hide certain meanings. Some of his thoughts are scattered throughout the interview, and if you add them up, you get interesting “pictures”. I'll try to give some "pictures" in a condensed form. And minimize quoting Zadornov so as not to overload the text.

First of all, as Zadornov says throughout the interview, there will be a sharp consolidation of the banking sector in the coming years. What will happen is what the classic in his work “Imperialism, as the Highest Stage of Capitalism” called the concentration and centralization of capital, leading to the formation of monopolies. Zadornov identified some characteristics of the consolidation of the banking sector

1. Of the 500 currently operating banks, 200 will remain. In other words, 300 will be sent to the “graveyard”
2. In the top 15 (apparently, this refers to the rating of Russian banks in terms of assets) all are “tenants”. There are no candidates for the "cemetery". These are not even just “tenants”. They are "immortal". In the language of Bank of Russia regulatory documents, they are usually called “systemically important banks.”
3. There are candidates for the “graveyard” in the top 50. Some of those who are numbered from 16 to 50 will be sent to the “graveyard”. However, maybe some of the “sick” people can be sent to a “sanatorium” for treatment (meaning sanitation).

Zadornov admitted that five hundred Russian banks today are cramped in the domestic market. And it’s tight because the economy is not showing economic growth. As a result, banks do not create anything, but only redistribute. Although I will add on my own behalf that in the picture presented by Zadornov it is not very clear where the cause is and where the effect is. Zadornov focuses on the fact that the consolidation of the banking sector is due to the lack of economic growth. But the absence of this is largely due to the fact that banks do not participate in lending to the real sector of the economy.

Zadornov admits this, but does not clearly name the reasons for such bank inaction. And, by and large, there are two of them.

Firstly, it is more interesting for banks to engage in “financial investments”, or, more simply put, operations in the financial market, speculation. Secondly, enterprises in the real sector of the economy do not take out loans that have prohibitively high interest rates. Enterprises somehow get by, either by “self-financing” or by raising money by placing securities.

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But the above two reasons, in turn, have a root cause, which Zadornov does not even mention. This root cause is the Central Bank with its idiotic idea of ​​“inflation targeting”, which is the rationale and justification for prohibitively high interest rates and compression money supply. Throughout the interview, Zadornov, in his thoughtful discussions about the future of the Russian banking system, surprisingly elegantly avoids the issue of the Central Bank and its policy of “targeted strangulation” of the Russian economy. The reason for all his troubles is “lack of economic growth.” And with that recognition, thank you. Isn’t this a bold statement against the backdrop of Mr. Maxim Oreshkin’s mantras that the Russian economy is “reviving” and “developing”?

I would like to remind the reader that since perestroika, Mikhail Mikhailovich has positioned himself as a consistent liberal, advocating deregulation of the economy, curtailment of the public sector of the economy, privatization, etc. But fate decreed that for fifteen years Zadornov led a bank that was not private, but state-owned. There was a certain internal evolution of Mikhail Mikhailovich’s views on the economic role of the state, especially in the banking sector. But by inertia he remains a liberal for everyone. And this dualism of his consciousness was clearly demonstrated in the interview. The journalist asks Mikhail Mikhailovich a tricky question: “If we talk about the future of the banking sector, what awaits us? Will there be total nationalization, which everyone is afraid of, including through the consolidation of the largest ones?”

Our liberal banker's answer is as follows:

Is everyone really afraid? Why then do they send their money to Sberbank and VTB? From the point of view of the risks of nationalization, this conversation is not substantive. Why? We know examples of efficient state-owned companies. For example, Aeroflot, Sberbank, VTB Insurance, VTB24. VTB24, for example, has been profitable for the last ten years, its return on capital is last years- over 30%. The profit of VTB Insurance at the end of 2017 will be more than 20 billion rubles according to IFRS. Consequently, the state can effectively manage business in the financial sector...

“If a bank is private,” Zadornov added, “does it automatically become more efficiently managed? Nothing of the sort. There are, as we see, examples of extremely ineffective management by private owners - with an unconditional desire to ultimately transfer the resulting losses to a partner or the state in order to avoid economic responsibility for own wrong business policies."

M. Zadornov. Photo: ID1974 / Shutterstock.com

But suddenly Zadornov, remembering what the “superior comrades” who placed him in a responsible position want from him, unexpectedly declares:

Although, in general, based on my own beliefs and experience, I agree: ultimately, private business is more effective than public business.

The economic liberal Zadornov is completely confused. However, I think that this is schizophrenia inherent in the majority of our liberals: they think one thing, but should always say something else. Here Zadornov made a mistake.

However, Zadornov’s colleague in the “shop,” German Gref, constantly makes “Freudian slips” in his public speeches. So far everything is getting away with it. Gref makes up for his “reservations” with deeds. For example, active participation in economic sanctions against Russia on the side of the West.

Zadornov's reservations about "efficiency state form property" tried to redeem right there on the spot, in an interview. Returning to the topic of "consolidation of the Russian banking sector", Mikhail Mikhailovich expressed the hope that the dead Russian banks will make room for foreign banks:

I hope that new banks will grow, new foreign capital will come, perhaps not always from Europe, but from Asian countries.

As we see, liberals here (Zadornov, Gref, Nabiullina, Kudrin, etc.) are unanimous in the opinion that the consolidation of the Russian banking sector is nothing more than preparing a platform for “long-awaited foreign guests.” There are only slight differences in who should be invited. The same Gref, who is a member of the board of directors of JP Morgan Chase, probably wants to see this bank in Russia first of all. Secretly, he probably dreams that Sberbank will change its sign and begin to be called “JP Morgan Chase Russia”. But Mikhail Mikhailovich is more sympathetic to Chinese and Japanese banks, with whom he became very friendly when he was the head of VTB24.

G. Gref. Photo: www.globallookpress.com

Zadornov’s positive ideas include his idea that chaos and chaos in the banking system should be eradicated not by adopting new laws, but by implementing those that have already been adopted. Still, let me quote Zadornov:

But, from my point of view, what is missing in Russia now is not new laws at all. Maybe we even take too many of them now. In Russia there is currently a lack of normal application of existing laws. It’s just that we are not used to performing them in a number of cases, even at the everyday level. From all that has been said above, it follows: the owners and management of banks must absolutely clearly understand their responsibility - material, administrative, criminal - for causing deliberate damage.

I fully subscribe to this thesis of the new head of Otkritie. But with a small addition. Bankers at all levels, including the Central Bank of the Russian Federation, must bear this responsibility. There are already individual examples of holding private bankers accountable credit institutions(the same Zadornov calls “Vneshprombank”, “Client” bank). But we cannot remember any cases where employees and managers of the Bank of Russia were held accountable. The Central Bank remains a “sacred cow”. Its leaders and employees have such “immunity” that diplomats and parliamentarians can envy. There must also be a material (economic) responsibility of the Bank of Russia. It must cover, at the expense of its reserves (and they are considerable, amounting to trillions of rubles), the losses of commercial banks and their clients arising as a result of incorrect decisions of the financial regulator. And without a complete vertical of responsibility in the banking system, banker Zadornov’s proposals become empty words.

Kudrin's plan: increasing taxes, retirement age, drug prices

Zadornov’s thesis is very correct that society (and other banks) must still understand what determines the decisions of the financial regulator to revoke a bank’s license and carry out reorganization. And here Mikhail Mikhailovich quite correctly admits that there are only two basic versions of the reasons: “It is important for the public to know whether this is a business loss or whether it is associated with fraud by the owners or management.” Regarding the banks “Ugra”, “Otkrytie”, “Bin”, “Promsvyazbank”, we still have not received a clear answer from the Central Bank as to what was behind each of the four banking stories: a business loss or fraud.

Well, Zadornov took the helm of Otkritie Bank and over time, he will probably be able to understand the entire history of the bank better than anyone else. So we are waiting for an answer from Mikhail Mikhailovich to the question: business loss or fraud? And if the second option, then whose fraud: the owners, management or joint fraud based on collusion?

Head of VTB 24 Mikhail Zadornov on the merger of the bank with VTB and the problems of FC Otkritie

Together with 2017, VTB 24, a bank that has been key in retail for many years, is becoming a thing of the past. Its leading managers will form the backbone of the management team of the Otkritie financial group, which is being reorganized by the new Central Bank fund. Is it really possible to restore and then sell the Otkritie business, what actually caused Rosgosstrakh to burn down, and whether the game of integrating the banks of the VTB group was worth the candle, the president of VTB 24 and the future head of Otkritie told Kommersant. Mikhail Zadornov.

- VTB 24 is actually your brainchild, which is now consigned to history. Was the decision to join rational?

The decision was made by shareholders a year ago. What's the point of discussing it now? There is no reflection, there is no such question in my head: was this decision correct? It all depends on how this idea is implemented. Will it be possible to build a common corporate culture, will costs decrease or, on the contrary, will they increase due to the fact that the project will be poorly managed. Well-done integration is a plus for shareholders and the cost of capital. A poorly executed integration can destroy a business. If things go wrong, both customers and the bank itself will suffer losses.

There were very successful integrations of banks, and there were extremely unsuccessful ones that ended in death. For example, ABN Amro together with Royal Bank of Scotland (in 2007, Royal Bank of Scotland entered into a consortium along with the Belgian Fortis and the Spanish Santander, which bought ABN Amro.- “Kommersant”). They bought it, won the competition from Barclays, tried to merge - and that’s it, in a competitive market there is no Royal Bank of Scotland, no ABN Amro.

- What difficult moments did you encounter in the process of preparing for the merger of banks?

The key thing is how the team of the merged bank will work, how much this living tissue will grow together in the heads of the employees: business, human relationships with each other and with clients. The corporate culture of VTB and VTB 24 is different, each organization has its own genesis. Of course, it is necessary to integrate operational processes, create a single balance sheet, clients must get used to the updated bank: there will be a new website, for some the payment details will change. But from the point of view of technological integration, the VTB Group has enormous experience. Over the past ten years, it has gone through a huge number of mergers, acquisitions, business transfers from one bank to another, and the sale of problem loans. Therefore, I am sure there will be no serious disruptions.

You'll be starting soon new job- Chairman of the Board of FC Otkritie Bank, were there any options, for example, to remain in the VTB Group?

There were all sorts of options: to stay in the group, and besides “Opening” there were other ideas and proposals.

- Which?

It’s a thing of the past; what can we talk about now?

- Why did you find the offer to head Otkritie interesting? It is, to put it mildly, unusual.

That's what makes it interesting. This is a huge project in terms of the scale of business not only of the bank itself, but also of Otkritie as a holding structure, including the insurance business, non-state pension funds (NPF.- “Kommersant”). Let me remind you that in all Russian non-state pension funds - approximately 2.2 trillion rubles. private pensions. The three funds of the Otkritie group account for 600 billion rubles, respectively, this is 27% of the total volume of all NPF funds, that is, colossal liabilities and great responsibility. Within the Otkritie group there are also a number of structures that are new to the financial sector: this is Tochka (a high-tech service for entrepreneurs.- “Kommersant”), this is Rocketbank (a high-tech service for individuals.- “Kommersant”). That is, right now, at the start, Otkritie is not just a bank, but a holding company with a full range of financial services for the population, for corporate clients, with one of the best investment banks on the market, as well as with one of the oldest brokerage companies on the market - “ Otkritie-broker”, which is one of the three leaders on the Moscow Exchange. Plus "Otkrytie" - the first experience of reorganization through the Central Bank Banking Sector Consolidation Fund (FCBS.- “Kommersant”).

The rehabilitation of Otkrytie under the management of FCBS Management Company is unfolding simultaneously with the rehabilitation of B&N Bank and Promsvyazbank. The Central Bank has repeatedly stated the possibility of merging Otkritie with B&N Bank. It’s logical to assume the same with Promsvyazbank?

This option is being discussed, but it is not the only one.

- What other options are there?

Let's wait for the first results of the work of the temporary administrations at Binbank and Promsvyazbank.

The Central Bank does not have practice in managing existing banks or developing them. Do I understand correctly that business decisions in the bank are yours?

Of course, from the point of view of developing and implementing Otkritie’s business strategy, yes. But the strategy itself will be approved by the Central Bank as a shareholder. More precisely, the board of directors of Otkritie, which will include not only the heads of the Central Bank, but also government representatives and independent directors.

You invited many employees from VTB 24 to Otkritie - retail and small business specialists. Where will you invite specialists in other areas?

We are carefully looking for such specialists on the market and believe that Otkrytie has the potential to attract the best talent on the market.

How? Hardly possible to attract employees good conditions: the bank is problematic, the same bonuses will definitely not be available for some time.

It won’t be for some time, yes, it’s a question of when it will become profitable. We try to interest you in the future.

Are you planning to develop Otkritie as a classic bank? Or how, for example, will Sberbank or Vnesheconombank adopt new fashionable practices, models, say, introduce intelligent management systems, Agile technology?

There is a declaration, and there is a real business. One of the principles of the VTB 24 team’s work is that the declaration and real results, real service do not differ much from each other. I think we will continue the same practice at Otkritie. For me, when declarations and the actual quality of customer service diverge, this is bad, it undermines trust in the brand, and creates unnecessary desynchronization in the heads of team members.

Otkritie does not yet have a business strategy. At the same time, today we already understand quite well strengths the entire financial group. The Central Bank has already announced that it is acquiring an additional issue of Otkritie shares in the amount of 456.2 billion rubles, so the problem of lack of capital has been basically solved. Although, I note that this is not a final decision, it does not affect Trust Bank (it was undergoing rehabilitation at Otkrytie, it is part of the FCBS perimeter.- “Kommersant”). Additional capitalization of Trust will take place in the first quarter of 2018.

We also see weaknesses, for example, we do not fully understand the volume of potentially problematic assets. It would be premature to draw conclusions about how much it will be possible to return, or with which of the former shareholders it will be possible to agree on more favorable terms for the bank to repay loans that were issued several years ago. We do not fully understand what assets will have to be returned to the balance sheet, what transactions carried out by shareholders over the last six months before the introduction of the temporary administration at Otkritie will have to be reversed.

- Is this what your team will do?

Of course. Together with colleagues from the Central Bank. By the end of December, we will already have approved business plans for 2018 for Rosgosstrakh and pension funds. Apparently, Otkritie’s business plan will be approved in the first quarter, and a new organizational structure will be formed in January. Also in the first quarter we will decide on problem assets. Problematic and non-core assets that are on the balance sheet of Otkritie, Trust, pension funds and Rosgosstrakh, we will gather them into a separate structure. Perhaps this will be a newly created fund, perhaps a “bad bank”, which can be formed on the basis of the same “Trust”. The form has not yet been selected.

You stated that working with Otkritie would benefit not only the bank itself, but also the entire market. Which?

Firstly, as can already be seen, the population and business quite calmly accepted the transfer of management of three large banks to the FCBS, to the Central Bank. Secondly, while putting business models in order, we will be required to work together with the market to change the rules of the game, introduce new standards, new technologies, and new methods of regulation in financial markets. Although Otkritie, Binbank, Promsvyazbank are the largest unstable banks, we understand perfectly well that some problems still remain in the system. The success of the reorganization under the new mechanism will contribute to the recovery of the entire banking system. The state will spend significantly less money. This, they say, is nationalization. But I wouldn't exaggerate. Before the introduction of the temporary administration, the assets of Otkritie, B&N Bank and Promsvyazbank totaled about 5% of the entire banking system, the population’s funds were larger - about 6%. A big number, but not critical.

Nevertheless, major bankers - Andrei Kostin, co-owner of Alfa Bank Petr Aven - criticize new system rehabilitation.

They cannot help but criticize because no one wants to get a new competitor in the market.

But Otkritie Bank was already a competitor to Alfa Bank; at one time it was the largest private bank in terms of assets.

Undoubtedly. Moreover, Alfa Bank and Otkritie competed for the reorganization of Trust, so it would be strange if everyone was happy that they had a competitor with the main shareholder in the person of the Central Bank.

In addition, bankers and experts say that it is not obvious that the banks being rehabilitated by the FCBS will be sold after the rehabilitation is completed. What are your ratings?

But here I disagree. I'll give you one number. We at VTB Group are now approving a business plan for next year. Based on the results of 2017, the return on capital for VTB 24 this year will be 36%. Roughly speaking, this means that the 100 billion rubles that VTB Group invests in the retail business gives a 36% return per year. These 100 billion will pay off in three years. We need to look for such payback on the market. If our team at Otkritie manages to show comparable results, I have no doubt that there will be both large and small investors who will want to invest their money in such a profitable business. At VTB 24 we had a lot of proposals to put shares up for sale - from investors both within the country and from foreign ones - the group just never agreed to it.

- Is there an option that Rosgosstrakh and the merged non-state pension funds will be sold and will not ultimately become part of the Otkritie group?

On this moment- no, and I don’t think he will appear. It is in order to increase capitalization and the attractiveness of the asset that Otkritie’s business must be considered as complex: banking, insurance and pensions. Let me give you an obvious example. The group has a fairly close relationship with LUKOIL; Otkritie Bank provides it with a wide range of services as a corporate client: settlement, treasury, business planning and others. At the same time, one of Otkritie’s funds is NPF LUKOIL-Garant, by the way, it has almost 250 billion rubles. pension savings - provides a pension program for LUKOIL. The structure of Rosgosstrakh includes the company Capital Insurance, which provides insurance services to LUKOIL. If you tear out any of these structures, then the complexity of the business for a client like LUKOIL, which has approximately 150 thousand employees, will weaken and reduce the cost of service. I can give the same examples for a lot of other clients. This explains why asking the question, “Let’s sell financial assets piecemeal,” is essentially wrong.

I am convinced that the strength of the Otkritie Group’s business model lies precisely in the fact that there is colossal synergy between the banking, pension and insurance businesses. We will replicate successful models in Otkrytie that we at VTB 24 have tested on millions of clients, and we will avoid the mistakes that many colleagues are making now.

- Rosgosstrakh, one might say, was burned out by compulsory motor liability insurance. What do you think will happen next with this segment?

You know, on the one hand, Rosgosstrakh really got burned by OSAGO, but I can say that this is a kind of general opinion. It’s a convenient way to present the situation. For me, Rosgosstrakh burned precisely because, having a unique position in the market, it managed, through its owners and management, to do absolutely nothing for ten years. Neither from the point of view of the IT platform, technology and network management, which are in a terrible state, nor from the point of view of the basic principles of manageability. In Rosgosstrakh, moreover, theft reigned from top to bottom. And after that we say that the company burned out due to OSAGO?! Maybe she was simply burned out by the fact that her business model does not correspond to today’s standards and was never aimed at bringing legal profits to shareholders?! Apparently, Rosgosstrakh shareholders preferred to receive benefits from owning the company in some other way.

- Is it now clear how the leadership of Rosgosstrakh will be structured?

Formed new advice directors of Rosgosstrakh, I have been entrusted with its leadership. By the end of the year, as I already said, the business plan for 2018 will be approved. The company will be recapitalized, and by the end of December a new board and top management will be fully formed.

I think it’s true that it is impossible to relatively quickly return Rosgosstrakh to second place in terms of fees and make it profitable without serious regulatory changes in the market. We will probably, together with other insurance companies, propose various changes. But according to the results of the 2017 investment campaign, NPFs will show not negative, but close to zero results, despite the fact that for nine months there was a minus.

With the arrival of the VTB 24 team at Otkritie, there is an opinion in the market that you will make retail the driver of the group’s development. This is true?

No, the bank will certainly be universal. At the same time, its model, as I already said, we will probably discuss for no less than a quarter, moreover, the model of not only the bank, but also the group as a whole.

- You said that it would take you two to three years to rehabilitate Otkritie. Does this forecast continue?

I did not say that. We may need less than a year to reorganize, but it will take two to three years to build a profitable, working business model.

- Then you will offer Otkritie to the market?

Regarding “offer to the market” - this is for the shareholder. We will not decide. The shareholder, and we have already talked about this more than once, is interested in ensuring that his conflict of interests does not last long, in selling the shares and returning part of the funds. No one ever said that all the invested funds would be returned, since, unfortunately, part of the capital that the Central Bank invests in both the bank and the insurance company is simply replacing holes in their balance sheets. These funds cannot be returned.

Zadornov Mikhail Mikhailovich

Private bussiness

Born on May 4, 1963 in Moscow. Graduated from the general economics department of the Moscow Institute of National Economy. G. V. Plekhanov (1984), graduate school at the Institute of Economics of the USSR Academy of Sciences (1988). Candidate of Economic Sciences.

1989–1990 - Jr. Researcher, researcher at the Institute of Economics of the USSR Academy of Sciences, expert at the planning and budget commission of the Supreme Council of the USSR. In 1990, he became a member of the State Commission for Economic Reform of the Council of Ministers of the RSFSR. He became one of the founders of the Center for Economic and Political Research (EPIcenter) and the Yabloko party. In 1993–1997, he was a State Duma deputy and headed the Committee on Budget, Taxes, Banking and Finance. In 1997–1999 - Minister of Finance of the Russian Federation. After leaving the government, he became an adviser to Sberbank President Andrei Kazmin, but in December 1999 he was again elected to the State Duma. Until 2005, he was Deputy Chairman of the State Duma Committee on Budget and Taxes. Since 2005, at the suggestion of the head of VTB, Andrey Kostin, he headed the subsidiary bank VTB 24 (formerly Guta Bank).

On January 1, 2018, Mikhail Zadornov assumed the position of Chairman of the Board of FC Otkritie Bank.

VTB 24 Bank and Otkritie FC Bank

Company profile

VTB 24 Bank is one of the largest participants in the Russian financial market. At the moment, the process of merger with VTB Bank is underway, it should be completed in early January 2018. According to SPARK-Interfax as of September 2017, VTB 24 ranked 4th in the country in terms of total assets - 3.454 trillion rubles. Deposits of individuals amounted to 2.339 trillion rubles. (2nd place). Volume of loans individuals- 1.778 trillion rubles. (2nd place). The bank's profit before taxes is 72.248 billion rubles. (4th place). The bank has 1,086 branches in 75 regions of the country.

Bank FC Otkritie, which has been under the control of the Central Bank of the Russian Federation since August 2017 and is undergoing a reorganization process, was previously the largest private bank in the country. In 2007, it was formed through the merger of ten banks of different sizes. The total volume of deposits of individuals as of September 1, 2017 was 388.505 billion rubles. (8th place). The volume of loans to individuals is 109.360 billion rubles. (18th place). The total assets of the bank are 1.754 trillion rubles. (8th place). At the beginning of December 2017, the Central Bank announced that it would allocate 456.2 billion rubles for additional capitalization of the bank FC Otkritie.

Interviewed by Yulia Polyakova

The Otkritie Group, being rehabilitated by the Bank of Russia, plans to become profitable by the end of this year, and in three years - to carry out privatization, said the Chairman of the Board of Otkritie Bank, Mikhail Zadornov, in an interview with RIA Novosti on the sidelines of SPIEF-2018. Zadornov, who headed the Ministry of Finance in the late 1990s, also shared his views on the economic situation in the country, expectations for the ruble exchange rate, expressed his attitude towards the nationalization of the banking system and explained why he does not see risks in the mortgage boom. The interview was conducted by Gulnara Vakhitova and Anastasia Saprykina.

— How can you characterize the current situation in the Russian banking sector? Do you share the opinion of a number of experts who warn about the risks of nationalization of the sector? Have these risks actually increased in Lately?

— It is difficult to deny that nationalization is taking place due to the reorganization of three banks, which owned approximately 5-6% of the population’s deposits and 5% of the assets of the banking system. These assets were transferred de facto through state reorganization. But I will emphasize that this is, of course, a temporary phenomenon due to the competence of the Central Bank, which is sanitizing Otkrytie and B&N Bank, and the task that the president and the government have set for us.

We must develop a profitable business model for the banking business and, starting in 2021, enter the market, sell shares of both the bank itself and, possibly, the insurance company Rosgosstrakh, pension funds, which are also part of our group.

Therefore, the goal of subsequent privatization is to sell the business to the market, by the shareholder. And not just to one financial group, as is often the case in Russia, but to a wide range of potential shareholders and investors.

This suggests that the movement in favor of the state in bank shares is temporary. This happened in England during the last financial crisis in 2008, when the government invested a total of about 65 billion pounds in several banks, most notably Royal Bank of Scotland, Lloyds Banking Group, HSBC Bank.

This happened in the USA in 2007-2008, when the state invested money in the banking and financial sectors, in the insurance market, in the automotive industry, and then sold it - somewhere with a profit, somewhere with a loss, but sold it to result. Therefore, this is such a temporary movement, inevitable during the period of bank reorganization, but it is worth saying that there was no political line towards the nationalization of the banking sector.

There is one more important point. Due to the difficult situation with the capital of European banks, Russian banks with foreign participation - Unicredit Bank, Rosbank, Raiffeisenbank - are not increasing their capital and market share. After all, there was a time when foreign banks owned 25-28% of the capital of the Russian banking system.

And when we say that capital is distributed in favor of the state, this also happens because foreign shareholders are not very actively investing in our banking sector, although it gives high returns.

— Why do you think?

— For Raiffeisen, of course, there was a concern that Russian business already occupies a very large share of business profits, they evened out this balance a little. Now, having made the alignment, I again see that they are beginning to again develop those types of business that they had previously abandoned - car lending, mortgages. For UniCredit, the Russian subsidiary is a donor that helps its parent company achieve better financial results.

But if foreign banks increased their capital, then the state’s share would be completely different. Therefore, this is not government policy. This is a complex of factors: rehabilitation and inactive investments from foreign investors.

— Speaking of foreign investors, how do you generally assess the investment climate in Russia?

— Unfortunately, according to official data, foreign direct investment in the Russian Federation amounted to $1.7 billion - this is nothing. That is, there is simply no foreign investment in Russia. It is clear that this is primarily due to the sanctions that were imposed against a number of enterprises and a number of sectors of the Russian economy.

This is also due to the fact that not only foreign but also Russian businesses do not sufficiently understand the rules of the game in the market. Now it is very important for the government to clearly state its program for the next political cycle and still solve a number of problems. From the point of view of tax administration, from the point of view of the process of registering small businesses, we have made great progress; the digitalization of a number of government services is certainly growing.

But there are questions regarding property, there are questions about the judicial system, there are questions about the process of obtaining construction permits and connecting energy networks. There is labor legislation that long ago needs to be translated from paper form into a digital document. There are obvious things that simply prevent you from opening or developing your own business. If these problems are solved, if we remove corruption at the everyday level that small and medium-sized enterprises face, and achieve transparent, efficient functioning of the judicial system, then, of course, this will provide the very investment climate that is needed.

And when sanctions were introduced against Russia, maybe, on the contrary, we should liberalize many things, rather than try to impose further restrictions? That is, not to introduce any sanctions, but, on the contrary, to implement conditions for doing business in Russia.

— How can you evaluate the effectiveness of public administration in Russia? Is it necessary to completely change the system, as many people are talking about, including Alexey Kudrin?

— There is no need to generalize on this issue. We have government services that work very well. The Tax Service has come a long way over the past 10-15 years, and the Ministry of Internal Affairs has made a big leap. There are areas that have experienced virtually no changes in recent years, but have only created additional problems. There is both.

But what is Alexey Leonidovich right about? We must give Special attention government services, try to, firstly, simplify them, and secondly, simply reduce supervisory functions on the part of the state and make them minimally necessary.

— We have a new government, a new ministry of digital development of communications and mass communications has appeared. How difficult do you think it is to move to a digital economy and what needs to change for our economy to truly digitize?

— The task is not easy, because these are actually mental changes, first of all, they should be made not only by the government, but first of all by the people themselves.

The IMF report contains one interesting figure: last year, 1.5 billion smartphones and 200 million personal computers were sold. Such a number of smartphones for 7 billion people means that the majority already have smartphones. It is clear that this has already become an integral part of the culture. If people send each other photos in instant messengers, then, in fact, gradually transferring some basic government services to smartphones is something that will already meet the mass behavior of people.

What do banks do? Over the past four years, banks have increased the penetration of mobile banking and Internet banking into basic services - payments, deposits. Probably, now up to 35-40% of active clients use this channel. This means that if people conduct banking services using smartphones, then certain government services can also be transferred to digital channels. But here we also need to pursue a consistent policy.

If I were the new minister, I would choose those services that are most in demand, and would bring these services to mass use, and then gradually people would begin to receive other services electronically. Here, a lot depends on the Ministry of Communications and the Gosuslugi portal. Because it is the mass service through the State Services website that is able to promote mass services in an online format.

— You said that you are one of the best public services- This is the tax service. Now the tax issue is in the news, the government plans to make certain changes. Do you think the current tax system needs to be changed?

— I am a former legislator who actively participated in the creation of the Tax Code. I have my own view on these things, and I think that our tax system is quite good.

The issue was in administration, administration has now been built. The system itself is Russian, it is absolutely not bad, and here I would adhere to the principle of “do no harm,” that is, touch our tax system to a minimum extent. It is quite effective, and, of course, some targeted changes are needed, but only targeted ones. There are new areas, for example, property taxation, which in Russia is not sufficiently structured and quite complex, but we can move forward in this area. There is taxation of complex financial instruments, which are only now being developed; it simply requires the writing of some new chapters, sections of the Tax Code.

But playing with tax rates, constant discussions on this issue, changes in tax regimes for individual industries, it seems to me that here we are focusing on the wrong things in terms of structural reforms, this is not what we need to do. The Russian tax system is quite competitive compared to others. After all, we have lived for the last six years with minimal changes to the tax system, and we must continue to live like this.

— I would like to move to the financial market. In April on Russian market There was volatility - the ruble exchange rate fell sharply, there were fears of an inflationary surge, but the Central Bank did not intervene in the situation. In your opinion, did the regulator act correctly then? Maybe it was worth carrying out currency interventions?

— The Central Bank could not do this, because the Central Bank clearly adheres to the free floating of the ruble. And he's absolutely right. As soon as the Central Bank begins to intervene with some kind of currency interventions, even in such fluctuations, this will immediately undermine confidence in its policy. Therefore, the Central Bank should not carry out any interventions.

He has a rate policy, and he actually controls inflation, the money supply through the rate, and not through the exchange rate. Therefore, the Central Bank acts here only possible way. But the Ministry of Finance, as you know, stopped purchasing foreign currency on the market for a while and thereby helped maintain the stability of the ruble. The ruble strengthened slightly, and the Ministry of Finance again entered the market.

But we must also understand that several factors coincided in April. After all, we have been experiencing a turning point in our attitude towards the dollar for the last two months. Markets expect the US Federal Reserve to make four rate hikes this year, with the 10-year Treasury yielding 3%. But we understand that the dollar will continue to strengthen against all currencies. Various currencies emerging markets have already lost from 3 to 7% of their value. At the same time, the ruble depreciated to a minimal extent against the backdrop of high oil prices.

— What do you think will happen to the ruble by the end of the year?

— If there are no new sanctions, there is no sharp drop in oil prices, and some reduction may occur from today’s levels, then the ruble will still strengthen somewhat further. But we see that on April 6 a package of sanctions was announced and this immediately affected the ruble. Any such foreign policy action, unfortunately, leads to a weakening of the national currency. But, in principle, the budget is in surplus, inflation remains low. There is no reason for the ruble to weaken

— How do you feel about the Central Bank's intention to tighten foreign currency lending?

— The Central Bank makes foreign currency lending unprofitable. I can say that in general, on the Russian retail market, banks practically do not lend in foreign currency; this is rather an exception. For commercial enterprises, for corporate enterprises, of course, there is foreign currency lending. It makes up about a third of the portfolio. This is largely due to export credits. We are still an export country.

Here, banks and enterprises themselves simply need to more carefully calculate the risks. Hedge these risks. Is it necessary to further complicate foreign currency lending by regulation? I don't know, I'm not sure. I think that the market itself should figure out this situation, since our exporters have gone through many crises, so we already have practical experience.

— For example, the largest banks - Sberbank and VTB - said that they cannot yet refuse foreign currency lending, since there is great demand from exporters. What is the situation at Otkritie Bank?

— We do not have very large foreign currency liabilities. We are reducing the government portfolio valuable papers on our balance sheet, namely in foreign currency, and we have foreign currency loans. These, as a rule, are again enterprises in the oil and gas sector, exporters, but they make up a small part of Otkritie’s portfolio. For us this is completely insensitive.

— How do you assess the level of debt among Russians?

— The debt burden has fallen over the past three years. People started borrowing again last year, and this year the figure is growing. Citizens have cleared out their personal balances, and therefore there is now a new wave of demand for retail loans. In general, I think the situation is normal.

Households, with the help of credit, in the absence of a large increase in real income, simply improve their standard of living and change cars. By the way, there is now active demand for both used cars and new ones. It is a rare case that sales of both used and new cars are growing.

Mortgages are growing, it is clear that, despite the fluctuations in the ruble, sales of tourist trips abroad have not fallen at all. That is, it is clear that in 2014-2016 there was such a drop in income and restrictions on people’s spending, and now people are starting to spend again, which means they are again raising their standard of living, including through loans. And so far this level of load is not dangerous. I don’t agree with the Central Bank here; we don’t have any boom that would threaten households.

— You noted the growth of mortgage lending. How do you rate him, how healthy is he?

In Russia, 1.4 million families will improve their living conditions through mortgages in 2018About 1.4 million Russian families will improve their living conditions through a mortgage in 2018, reported at SPIEF CEO State company "Dom.rf" Alexander Plutnik.

— The growth is absolutely natural, it has created market growth of 10-12% per year for three years now — this is healthy growth. But this year will be special, since up to 20% of all portfolios will be turned over through refinancing, that is, in many ways, banks are working to refinance existing portfolios, each other’s and their own. Because it is still profitable now to refinance loans issued in 2015-2016. Beneficial for both people and banks. It does not increase the portfolios themselves.

— Last year, Otkritie Bank suffered a net loss under IFRS. Will the bank be able to turn a profit in 2018?

— Yes, we closed the balance sheet for 2017 according to IFRS with a loss of about 400 billion rubles, if we are talking about Otkritie as a whole, including its subsidiaries. And we plan to become profitable in 2018, both in the banking business - Otkritie and B&N Bank, and in Rosgosstrakh. So far, in the first quarter, Rosgosstrakh showed a small profit of a billion rubles, and Otkritie has a profit based on the results of the first quarter. And our task is to maintain the positive result that we saw in the first quarter.

— Now the Central Bank is creating a fund of bad and non-core assets. Is it already known how much assets Otkritie will transfer to the fund’s balance sheet?

— We have assessed it, but we would prefer to announce the exact volume when the Central Bank and I discuss the entire outline. It is clear that the assets of Rost Bank and Trust Bank are already more than one trillion rubles. This will be a fairly large bank at face value, but you need to understand that this is face value. The real value of these assets is not at all what is on the balance sheets. Their real cost is much less.

— Do you have an understanding that the Otkritie brand will definitely be preserved?

— The final decision has not been made yet. We will soon complete work on the strategy, then we will tell you.

Education and military service

In 1984, he graduated with honors from the general economics department of the Moscow Institute of National Economy (MINKh) named after G.V. Plekhanov with a degree in economics. With a break from military service, in 1985-1986 he completed graduate school at the Institute of Economics of the USSR Academy of Sciences, and in 1988 he became a candidate of economic sciences.

Labor activity

In 1990, he became one of the economists who, as part of the State Commission for Economic Reform of the Council of Ministers of the RSFSR under the leadership of Grigory Yavlinsky, developed the “500 days” program, providing for the transition Soviet Union from a planned economy to a market economy.

In 1991, he took part in the creation of the Center for Economic and Political Research (“EPIcenter”). In 1993, he became one of the founders of the Yabloko movement, which was later transformed into the political party of the same name.

In December 1993, he received the mandate of a State Duma deputy, and when distributing posts in the lower house of parliament, he headed the committee on budget, taxes, banks and finance.

In 1997, he joined the board of directors of Sberbank. In the same year, he was invited to work in the government, where until May 1999 he headed the Ministry of Finance, having worked under three prime ministers during this time - Viktor Chernomyrdin, Sergei Kiriyenko and Yevgeny Primakov.

After leaving the government, in the fall of 1999 he became an adviser to the then president of Sberbank Andrei Kazmin and was soon again elected to the State Duma, where until the summer of 2005 he served as deputy chairman of the budget and taxes committee.

In 2005, the head of VTB, Andrei Kostin, invited him to head Guta-Bank, purchased during the 2004 banking crisis (later renamed VTB 24). Since 2005, as President and Chairman of the Board of VTB 24, he has been developing the retail banking business within the VTB Group.

On May 31, 2017, the VTB Supervisory Board elected members of the bank’s board, including new line-up the head of VTB 24 did not enter.

At the XV International Banking Forum in Sochi, the Chairman of the Central Bank, Elvira Nabiullina, said that he would head the reorganized bank FC Otkritie after the end of the interim administration. Later it became known that he would take the chair of the head of Otkritie from the beginning of 2018, and before that he would continue to work as president and chairman of the board of VTB 24 bank. The latter will be merged with VTB from 2018.

On November 28, 2017, the press service of Rosgosstrakh announced his appointment as chairman of the company’s board of directors.

On December 22, 2017, the new supervisory board of the Otkritie FC bank, headed by Ksenia Yudaeva, elected him chairman of the board from January 1, 2018.

On March 26, 2018, it became known that the board of directors of B&N Bank elected him as its chairman.
From January 1, 2019, Otkritie Bank and B&N Bank (including B&N Bank Digital) merged under the Otkritie brand and with the Otkritie FC license.

Banker about himself

According to him, his experience in political work helps him a lot in leading the bank: he finds a lot in common between the principles of an election campaign and the promotion of banking products.

He claims that he managed to realize himself both as a politician and as a financier, and considers VTB 24 one of the most interesting business projects in the country. The banker also dreams of going into science and teaching.

Hobbies

As a child, Mikhail was a passionate falerist - he collected badges with the coats of arms of cities.

He is interested in theater, music and poetry. Also loves traveling and walking in nature. He is an avid mushroom picker.

He plays football well, has a first class in cross-country skiing and has recently started training in alpine skiing.

Family status

Married, he has a daughter.