Eastern Bank

Performance indicators

2021

Employee Fraud Detection

An employee of the Klintsov operophis of Vostochny Bank will go on trial for theft from the accounts of bank customers. She entered passwords from personal accounts and bank accounts of seven bank customers into the database and, without their consent, secretly issued bank cards on them, to which she withdrew money from their credit cards. Then she cashed the stolen money at an ATM.

Take-off of overdue debt

2019

Profit 6.2 billion rubles under IFRS

On April 28, 2020, Vostochny Bank announced to TAdviser the results of 2019 on international financial reporting standards (IFRS). The bank's net profit amounted to 6.2 billion rubles, which is 16.2% less than the same indicator in 2018 (7.4 billion rubles). At the same time, net profit excluding the increased contribution to the DIA amounted to 9 billion rubles, which is 22.8% or 1.7 billion rubles more than this figure for the same period in 2018. In 2019, the Bank's capital increased by 25.3% or 6 billion rubles and amounted to 29.6 billion rubles (2018: 23.6 billion rubles). Capital growth was due to 2019 profit.

Net interest income (excluding the increased contribution to the DIA), net of deductions to reserves, increased by 2.2 billion rubles to 14.9 billion rubles. The growth of this indicator is associated with an increase in interest income on loans to individuals by 0.5 billion rubles, as well as lower expenses for the creation of reserves in 2019 (compared to 2018): by 1.9 billion rubles or by 60% for loans to legal entities; 1.1 billion or 23% on loans to individuals.

In 2019, the Bank significantly reduced its securities portfolio, recording a positive financial result. The decrease in the securities portfolio led to a decrease in the balance sheet currency, which amounted to 193.8 billion rubles (2018: 234.1 billion rubles). At the same time, the Bank continued to increase the loan portfolio of individuals, which increased by 5% or by 4.4 billion rubles and amounted to 93 billion rubles.

Thanks to strict cost control, the bank's economic and administrative expenses in 2019 decreased by 12.4%, saving amounted to 626 million rubles. Efficiency indicators amounted (excluding the increased contribution to the DIA): ROA asset profitability - 4.2% (2018: 2.5%); ROE return on equity - 37.4% (2018: 27.8%); CIR business efficiency - 40.1% (2018: 41.3%)

Profit 2.3 billion rubles under RAS

• According to RAS, the bank's net profit amounted to 2.3 billion rubles, an increase of 44% compared to the result of 2018.
• The loan portfolio of individuals in 2019 increased by 1.3% and amounted to 91.8 billion rubles, while there is an improvement in the quality of the loan portfolio, mainly due to effective risk management.
• Net interest income grew by 3% and amounted to 24.6 billion rubles due to the growth of the retail loan portfolio and a decrease in the cost of funding. So, interest expenses decreased by 14% amid a general market cut in rates.

Attracting 15,000 customers in the SME segment

On February 28, 2020, Vostochny Bank announced the results of work with small and medium-sized businesses (SMEs) in 2019. In 2019, the bank attracted over 15 thousand customers in the SME segment. The total number of legal entities and individual entrepreneurs serving at Vostochny Bank in 2019 exceeded the figure of 31 thousand customers.

As of February 2020, Vostochny offers a full range of services for SMEs in more than 170 cities of Russia. The most active are entrepreneurs of Moscow and Moscow Region, St. Petersburg, Sverdlovsk and Samara Regions.

The bank offers entrepreneurs not just disparate financial products and services, but a comprehensive approach to financial management of business. Vostochny services include a line of RKO packages specialized in various types and sizes of business, all types of acquiring, online cash desks, credit support, as well as numerous bonuses from partners, for example, discounts and free program maintenance for automating trade and customer management.

Шаблон:Quote 'author = commented on the Direction Curator of SME Bank Vostochny Nikolai Petelin

The fintech service for business VostokBusinessPartner (VostokBP) will be based on the business2human model, combining the bank's capabilities for individuals and legal entities based on digital solutions and a federal network of branches. The service will be as seamlessly as possible integrated into the digital life of the client (online cinemas, car sharing, social networks, etc.), provide for a flexible tariff policy with the ability to customize options, and have a friendly user interface. Communication with the SME client will be carried out according to the "push-model" with the ability to put the mode of communication with the bank on autopilot. The plans of the SME direction include the development of a "family" of non-financial services for non-customers, with the possibility of their use without opening an account, as well as the creation of a global platform for communication between entrepreneurs in online and offline formats.

The VostokBP will be developed by a project team consisting of big data specialists, developers and product managers from non-bank segments with an entrepreneurial background.

Extradition of 377 thousand POS loans worth 17.04 billion rubles

Vostochny Bank summed up the results of 2019 in the direction of POS lending: 377 thousand were issued. POS loans in the amount of 17.04 billion rubles. The growth of the partner base in 2019 is more than 30%. The bank is represented in more than 12 thousand points of sale, Vostochny reported on February 19, 2020.

The average amount of a POS loan in the bank has not changed compared to 2018 and is 45 thousand rubles. At the same time, residents of the following cities take loans in retail outlets (in addition to Moscow): St. Petersburg, Yekaterinburg, Ufa, Novosibirsk, Chelyabinsk.

In general, in the country, the three most popular segments in the POS lending of Vostochny Bank in 2019 look like this:

• 1. home appliances and electronics,
• 2. furniture,
• 3. clothes.

The most popular credit products on the market are still installments, in which the seller of the goods compensates for the overpayment of the loan due to a discount.

In 2020, Vostochny Bank will continue to expand cooperation with current partners, attract new companies to cooperate in the field of POS lending. Also in the coming year, we will continue to improve technologies for providing POS loans for goods purchased in online stores, "said Valentin Fedchin, director of the POS lending department of Vostochny Bank.

139% increase in revenue from operations in remote services

Vostochny Bank summarizes the results of the development of remote banking services (DBO) in 2019 on February 4, 2020. According to the previously adopted program of digital business transformation, Vostochny continues the comprehensive development of remote banking services. The bank offers digital products and services, which, according to its estimates, can close almost all basic customer needs for managing their finances. In 2019, the digital business team introduced new functions into the bank's remote services and achieved an increase in key development indicators in the BBO.

In 2019, the penetration of digital services among bank customers increased 1.6 times, reaching the level of 43%. The number of unique users who use BBO at least once a month has reached 400 thousand people.

The most popular transactions in the bank's remote services remain the same: loan repayment, payment for services, external and internal transfers, loan applications. At the end of 2019, the total volume of operations in BBO services increased by 121% compared to 2018. At the same time, income from operations in remote services in 2019 increased by 139% compared to 2018, Vostochny noted.

In February 2019, an updated bank website was launched for retail and VIP customers. Thanks to this, the volume of loans issued on applications created on the Vostochny website increased 1.5 times compared to 2018.

The most important direction for the development of retail BBO in 2019 was online lending. Vostochny implemented the function of obtaining loans up to 200 thousand rubles through a mobile and Internet bank. Thanks to this, mobile and Internet banks have become one of the fastest growing sales channels for Vostochny credit products.

According to 2019, the main means of interaction between the client and the bank becomes. smartphone Specialists of Vostochny note that even those customers who prefer to use not mobile, but Internet Bank increasingly go there with the help of, smartphone rather than personal. computer Among users of Vostochny Internet Bank, the share of such customers is 40%. That is why in 2019 the bank paid considerable attention to the refinement and improvement smartphones of the version of the Internet bank adapted for it.

History

2022: Vostochny Bank officially ceased to exist

On February 14, 2022, Vostochny Bank officially ceased to exist. He was attached to Sovcombank, which became the successor to his obligations and assets. The operational integration of banks was completed in 2021. This was reported to TAdviser in the press service of Sovcombank.

It is noted that the integration of the two banks has become one of the largest in Russia. During the accession, 1 million loans worth 76 billion rubles and a portfolio of current accounts and deposits worth 116 billion rubles were transferred to the balance of Sovcombank. About 3 million customers of Vostochny Design Bureau also transferred to Sovcombank. In addition, Sovcombank increased the availability of the bank's products and services in key regions of its presence, including the Far East and Siberia, due to the expansion of the retail network by 264 branches of Vostochny. By mid-February 2022, the branch network of Sovcombank already has 2629 offices.

2021

Sovcombank reduced 50% of Vostochny Bank's staff or 4 thousand people

On August 17, 2021, it became known that the number of employees of Vostochny Bank was reduced by 50% after it was bought by Sovkobman. Over 4 months, the number of employees decreased by 4 thousand people.

According to Kommersant, citing the quarterly securities report of Vostochny Bank, its average staff at the end of the first half of the year decreased from 8,300 to 5800 people. Sovcombank, which closed the deal to buy Vostochny in April, confirmed that as of August 1, 50% of the bank's staff had been reduced. Another 30% of employees went to work at Sovcombank, and 20% continue to work at Vostochny.

According to Olga Ulyanova, vice president of Moody's, a reduction in staff at the moment will increase Sovcombank's expenses for compensation, but in the future, the combined bank will result in savings in employee costs.

Sovcombank began by reducing Vostochny's back office, and staff who work directly with customers underwent less cuts. This is a completely rational approach, given that the main business of Vostochny - retail - continues to generate income, "she said in a conversation with the newspaper.

The process of joining Vostochny to Sovcombank will be completed in early 2022. According to Kommersant, at the end of the first quarter there were eight branches and 539 offices in the Vostochny network, now 222 branches have passed under the brand.

According to experts, former Vostochny employees will not be easy to find a job, as many banks reduce staff by automating and digitalizing processes. The hardest thing will be the bank's employees in the Far East, where the network of branches of credit organizations is almost not growing, said Deloitte partner in the CIS Andrei Nagurny.^[1]

Bank Vostochny in the sale to Sovcombank estimated at 11 billion rubles

On May 20, 2021, it became known about the assessment of Vostochny Bank as part of a deal to sell it to Sovcombank.

According to RBC with reference to the website of the Disclosure Center, Sovcombank put up an offer to Vostochny minority shareholders at a price of 0.0137 rubles per share. Given that Vostochny's share capital is 802.9 billion shares and 20 thousand preferred shares, a credit institution is estimated at 11 billion rubles, or 0.4 billion capital (24.6 billion rubles at the beginning of April). The deal is closed.

Thus, Vostochny was sold half as much as its capital. If the buyer acquires a non-public company, then he cannot offer minority shareholders an offer at a price lower than the one under which the transaction was made, determined in 2013 the then existing Supreme Arbitration Court (later his powers were transferred to the Supreme Court).

The representative of Sovcombank in a conversation with the publication did not confirm or deny the purchase price.

According to the rules, the offer price is the largest of the price of the last transaction and market valuation, "he said.

According to the interlocutor, Sovcombank plans to consolidate 100% of Vostochny, the offer to minority shareholders will expire on July 29, 2021, and settlements with shareholders will have to be completed within ten days from this date.

Co-owner of Sovcombank Sergey Khotimsky in an interview with RBC did not disclose the purchase price, but said that Vostochny cost Sovcombank "much cheaper" capital. The retail business of Vostochny was of primary importance when buying an asset, Khotimsky noted.

Roman Rybalkin, deputy director of the S&P financial institutions group, called 11 billion rubles "a completely objective price," given the claims of the Central Bank of the Russian Federation against Vostochny, restrictions and increased deductions to the Deposit Insurance Fund.^[2]

Vostochny Bank brand ceases to exist

At the end of April 2021, the Vostochny bank brand will cease to exist after the takeover by Sovcombank. This was announced by co-owner and first deputy chairman of Sovcombank Sergey Khotimsky. Explaining this decision, he noted that "investing in two brands is expensive."

According to him, "the whole point of synergy when merging banks is that the costs are smarter, so as not to keep parallel systems, parallel processes, parallel brands."

We bought a bank from which the Central Bank did not get out during all these years. A bank in which managers understood that a step to the left, a step to the right can end in criminal cases. A bank in which the desire to do something not according to the rules is simply minimized, "Khotimsky said in an interview with RBC.

He recalled that the former deputy chairman of Sovcombank Kirill Sokolov became the chairman of the board of Vostochny. Board members and top managers who held key positions in Vostochny came under reduction. He did not rule out a change in the number of line personnel.

Most top managers have already left the bank, but there is a huge strength on the ground in people, in middle-level specialists, in sellers throughout the country. This is what the bank attracts, what it was purchased for... There are branches where Sovcombank and Vostochny are simply located in neighboring entrances. Maybe there will be one branch chosen, but the teams will be integrated, "added Khotimsky.

As of the beginning of 2021, 9.4 thousand employees worked in Vostochny. The bank has eight branches and 569 offices in Russia. Sovcombank's network is four times larger: the credit institution had 2.3 thousand offices in 76 regions of the country. The number of staff is 16.9 thousand people. The deadline for the transfer of Vostochny branches to the Sovcombank network was Sergey Khotimsky called the first quarter of 2022.^[3]

Sovcombank bought Vostochny Bank and contributed 7 billion rubles to its capital

On April 8, 2021, Sovcombank announced the closure of the transaction to acquire Vostochny Bank and announced the introduction of 7 billion rubles of its own funds into its capital. This measure will allow Vostochny with a large margin to fulfill all capital standards, taking into account the allowances recommended by the Central Bank. Vostochny fully complies with all regulatory capital adequacy standards, the Sovcombank explained.

According to the Bank of Russia, as of March 1, 201, Sovcombank's own funds amounted to 27.6 billion rubles. The bank complies with the capital adequacy standard H1.1 with a small margin of 5.691% (with mandatory 4.5% and 6.75% recommended by the Central Bank).

Our primary task as a new owner is to strengthen the financial situation of Vostochny and provide it with all the necessary resources to develop and maintain the confidence of employees and customers in its reliability, "said co-owner of Sovcombank Sergey Khotimsky, whose words are quoted in a press release.

According to him, the recapitalization of Vostochny will be the first step to strengthen the financial situation of the bank. At the same time, financial injections are not included in the perimeter of the transaction for the sale of Vostochny to Sovcombank and did not affect the value of the credit institution being sold. Recapitalization is needed for business growth, the press service transmitted Khotimsky's answers to RBC questions.

According to Expert RA rating agency, Vostochny Bank in recent years has been characterized by low capital adequacy mainly due to the creation of reserves for loans for the corporate portfolio. In the last year before the sale, Vostochny created additional reserves for the corporate portfolio in the amount of 9.7 billion rubles, and also amortized the portfolio of guarantees, according to RBC's publication of April 8, 2021.^[4][5]

Appointment of Kirill Sokolov as Chairman of the Board of Vostochny Design Bureau

In April 2021, the Board of Directors of Vostochny Bank appointed Kirill Sokolov to the post of Chairman of the Bank's Board. This was announced on April 8, 2021 by TAdviser in the Vostochny Design Bureau.

Sovcombank buys Vostochny Bank

March 25, 2021 Sovcombank announced the purchase of Vostochny Bank. The transaction, the cost of which its participants did not disclose (it is noted only that it takes place on market conditions), is planned to be closed within a few weeks after obtaining permits from the Central Bank of the Russian Federation and the Federal Antimonopoly Service.

Sovcombank plans to integrate and join Vostochny Bank within 12-18 months. Chairman of the Board of Sovcombank Dmitry Gusev, whose words are quoted in the press release, noted that as a result of the transaction, the bank will strengthen "positions in the retail business, expand the branch network, and also increase the availability" of products and services, primarily in Siberia and the Far East.

By the end of March 2021, Sovcombank has about 2.3 thousand branches and mini-offices in 988 settlements. Vostochny Bank has 570 offices, most of which are located in the Far Eastern Federal District.

The transaction became possible as a result of a consistent decrease in the share of corporate business in Vostochny's assets. The bank's management has done a lot of work to increase business efficiency and optimize the loan portfolio, create reserves, repay loans and sell non-core assets. As a result, the bank has become more attractive for purchase, "said Yury Gusev, director of Finvizhn (the company acted as one of the sellers of Vostochny shares).

Shortly before the sale of Vostochny Bank was announced, he was in a state of corporate conflict. Vostochny Bank announced the rejection of a claim for 2.5 billion rubles to the founder of the Baring Vostokk investment fund, Michael Kalvi, and other criminal defendants in the case. 

In the last year, problematic assets were gradually withdrawn from Vostochny, and on the eve of the appearance of information about the merger, this process intensified.^[6]

2020

Agreement with the First Collection Bureau to receive 2.54 billion rubles.

On October 28, 2020, Vostochny Bank announced that together with NAO and the First Collection Bureau, they had reached an agreement as a result of which the Bank would receive 2 545 670 584 (two billion five hundred forty-five million six hundred seventy thousand five hundred eighty-four) rubles. After receiving money the Bank plans to refuse the civil suit submitted within the criminal case No. 11902007703000024 which is in production of the Main Investigation Department of Investigative Committee of the Russian Federation in connection with settlement of requirements of Bank.

Earlier, the First Court of Appeal of General Jurisdiction recognized the extension until November 13 of the house arrest of the founder of the Baring Vostok investment fund Michael Culvey. For the same period, five other defendants in the case will remain under house arrest: Baring Vostok investment director Ivan Zyuzin, foundation partners Vagan Abgaryan and Philip Delpal, general director of the First Collection Bureau Maxim Vladimirov, as well as former chairman of the board of Vostochny Bank Alexei Kordichev.

Kalvi was accused of especially large-scale fraud when concluding a transaction on the purchase by Vostochny Bank of shares in the First Collection Bureau company, but in December the investigation changed the charge to embezzlement. The investigation believes that the price of the asset was overstated, and the transaction brought losses to the bank.

The investigating authorities refer to the audit report of the PricewaterhouseCoopers on the concluded transaction, to which the shares sold are estimated at 600 thousand rubles, which, according to the investigator, indicates the commission of a crime.

At the same time, Delpal explained that the examination estimated the controversial shares at 254 million rubles, saying that the valuation could not be complete without assets related to the shares, and this, according to Delpal, is already an amount of 4 billion rubles.

As of October 2020, the investigation in the criminal case has been completed, the defendants, together with their defenders, get acquainted with the materials of the criminal case, the volume of which is 75 volumes^[7].

The bank secured the seizure of a 42% stake in Baring Vostok

In October 2020, Vostochny Bank Artem Avetisyan secured the seizure of a 42% stake in a bank controlled by the Baring Vostok fund.

The reason for the statement of "fraudulent actions" was a transaction between Vostochny Bank and Croushi Enterprises (also controlled by Kalvi). In November 2016, the bank acquired from Cyprus Croushi a 10.1% stake in Alliance Consulting (owns the insurance company Reserve) for 696 million rubles. At the same time, Evison transferred another 9.8% of Alliance Consulting shares to the bank without payment.

Alliance Consulting is 49.32% owned by Expobank co-owner Igor Kim, 19.9%  by Vostochny.

Baring Vostok founder Michael Kalvi and his partners in Russia are under house arrest in the case of embezzlement of 2.5 billion rubles.

Supreme Court confirms obligation of Baring Vostok to sell 9.99% of bank to A. Avetisian

On May 27, 2020, the Supreme Court of Russia decided not to review the judicial acts of three lower instances that ordered Evison Holdings Limited, a Cypriot company controlled by Baring Vostok, to sell 9.99% of Vostochny Bank to the companies of businessman Artem Avetisyan Finvizhn.

As follows from the information in the file cabinet of arbitration cases, the judge of the Armed Forces of the Russian Federation Elena Zolotova rejected the cassation appeal of Evison, which asked to transfer the case for review to the Judicial Board on Economic Disputes.

As commented by RIA Novosti in Finvizhn, the decision of the Supreme Court confirms the legal position of the company. "Now that the courts in two jurisdictions - LCIA in England and the Russian courts of all instances - have confirmed Finvizhn's right to option shares, we hope that the managers of the Baring Vostok fund will stop calling the legal exercise of Finvizhn's right to an option through the court - a" raider seizure, "the company said.

The Amur Region Arbitration Court in May 2019, in a lawsuit by Finvizhn, at that time the minority shareholder of Vostochny, ordered the majority shareholder Evison to execute the call option agreement of August 26, 2016. Under the terms of the agreement, the Cypriot company was supposed to sell to the plaintiff part of its share in the authorized capital of the bank for 750 million rubles, but subsequently refused to fulfill the contract.

As the court indicated then, in case of non-fulfillment of the court decision within 5 calendar days from the date of its entry into force, the shares will be debited from the personal account of Evison and credited to the personal account of Finvizhn after the presentation of the last evidence of the transfer of 750 million rubles to the account of Evison.

The full text of the decision was made on May 24, 2019, and on June 11, the court of first instance, at the request of Finvizhn, adopted a determination by which it ordered the defendant Evison to execute the decision on the sale of option shares immediately. Baring Vostok announced on June 18 that it had transferred a controversial stake in Finvizhn, thanks to which control over the bank passed to it. At the end of June, Finvizhn was already able to vote with these shares at a meeting of shareholders. The decision of the first instance was then upheld by the Sixth Arbitration Court of Appeal and the Arbitration Court of the Far Eastern District.

In parallel, the parties are conducting several arbitration proceedings. In particular, a court in the Amur Region is considering two claims of Vostochny to recover losses from Evison and Kalvi - by 9.8 billion and 8.8 billion rubles.

Svetlana Trukhanovich appointed acting Chairman of the Management Board

On May 20, 2020, Vostochny KB PJSC informed TAdviser that the Board of Directors decided to appoint Svetlana Trukhanovich as acting Chairman of the Bank's Management Board and send her candidacy for approval to the Bank of Russia. More details here.

Bank box office robbery in St. Petersburg

Serial bank robbers were detained in St. Petersburg. They're caught robbing Vostochny Bank again. They previously robbed Raiffeisen Bank.

On March 16, 2020 at 8 pm, a man in camouflage, a mask and a machine gun put everyone in the floor with his face and took cash from the Vostochny cash register. Stolen 5 million rubles.

Appointment of Dmitry Olyunin to the post of President

2019

Default on Eurobonds for $125 million

In November 2019, bankers left about 300 VIP customers of Vostochny Bank without payments and defaulted. SCI Finance B.V., which issued perpetual subordinated Eurobonds of Vostochny Bank for $125 million, told debt holders that the bank was canceling the payment of coupon income on November 29, 2019.

The rate on perpetual dollar securities, which the bank placed among its VIP customers, was 10% per annum, coupon income was paid twice a year. The second annual coupon for $6.25 million (about 400 million rubles) was unpaid.

Artem Avetisyan elected Chairman of the Board of Directors

According to the regulation on the Board of Directors of Vostochny Bank, at the first meeting of the updated composition, it is supposed to elect a chairman from among the current members of the Board. On November 5, 2019, Artem Avetisyan was elected its chairman by a general decision of the Board of Directors.

In turn, Svetlana Trukhanovich, who previously headed the Board of Directors of the bank, was appointed to the post of Deputy Chairman of the Management Board, a member of the Management Board of PJSC KB Vostochny.

Vyacheslav Harutyunyan was approved as Chairman of the Board of PJSC KB Vostochny.

Vostochny Bank hires Modulbank IT team for digital transformation

On September 10, 2019, Vostochny Bank informed TAdviser that, in accordance with the updated development strategy, it is starting to implement the Digital Business Transformation program.

We want to create a digital bank. The main focus will be on increasing commission income, "explained Vyacheslav Harutyunyan, acting Chairman of the Board of Vostochny Bank.

As part of the implementation of this program, the bank plans to significantly restructure and optimize the work of its key IT and business divisions and offer its retail and corporate customers new products based on modern digital technologies.

Vostochny Bank intends to use the expertise and experience of Modulbank to implement the Digital Transformation program. To this end, the Modulbank team - Modulbank Chief information officer Ivan Karpov, as well as two of the founders of Modulbank, who will head the office of Vostochny Bank Digital Transformation, were invited to Vostochny Bank.

We believe that the experience of colleagues who created a digital bank for entrepreneurs at the Modulbank site from scratch will help Vostochny Bank become one of the market leaders in online service, "said Vyacheslav Harutyunyan, acting Chairman of the Board of Vostochny Bank.

According to representatives of Vostochny, the main elements of digital transformation will be the provision of products to bank customers for small businesses - mobile banking, online cash desks and online accounting, a reduction in the cost of opening accounts and customer service due to the technology of identifying customers with couriers outside the office and a solution for AML (anti-money launding) and KYC (know your customer), as well as the creation of a process of customer support based on artificial intelligence.

Vyacheslav Harutyunyan - Acting Chairman, Konstantin Rogov - Chief Executive Officer of the Bank

On July 4, 2019, Vostochny Design Bureau announced that the Bank's Board of Directors had decided to appoint Vyacheslav Gerasimovich Harutyunyan as Acting Chairman of the Board of Directors of Vostochny Bank, and Konstantin Alekeslavovich Rogov as Chief Executive Officer of Vostochny Bank while retaining the post of Deputy Chairman of the Board.

In anticipation of the reversal of the next cycle in retail lending, the Board of Directors believes that business diversification in favor of more sustainable income is a priority for the bank.

These personnel decisions are important at the current stage of the bank's development. Vyacheslav Harutyunyan should build a comprehensive work with corporate borrowers in order to restore the quality of the portfolio, ensure the return and profitability of loans already issued. Konstantin Rogov, in turn, will concentrate on financial control and on RWA optimization measures in order to reduce the capital intensity of the balance sheet and achieve the maximum positive effect on the bank's capital reserve, "commented Svetlana Trukhanovich, chairman of the Board of Directors of Vostochny Bank.

Board scandal. Svetlana Trukhanovich elected chairman

On July 2, 2019, Vostochny Bank announced the election of Svetlana Trukhanovich as Chairman of the Board of Directors. As a result, the bank completed the formation of the SD.

The board of directors of Vostochny Bank was expected to end in scandal. Artem Avetisyan elected 5 of his directors out of 9, and Baring Vostok received 4 seats.

Nevertheless, Baring Vostok considers the new supervisory body illegitimate and intends to challenge the decision of the shareholder meeting in court. The reason is the election of candidates who refused to participate in the board of directors.

Six Baring Vostok candidates withdrew their consent to be elected to the board of directors. Despite the direct recommendation of the registrar not to vote for the candidates who withdrew their consent, Avetisian elected three out of six people to the board of directors against their will. They are afraid of the possible continuation of criminal prosecution by Avetisian and asked to remove them from the voting list for solidarity with colleagues who are behind bars.

The updated composition of the supervisory body did not include representatives of Baring Vostok Michael Kalvi, Philip Delpal and Ivan Zyuzin, who are involved in the criminal case of embezzlement of funds from the bank and are under arrest. 

The conflict does not benefit the Eastern. In May, the bank for 30 days allowed a decrease in the standard of adequacy of basic capital H1.1 below 7% (4.99%), which is separately noted by the regulator. A similar violation is observed for the third month in a row.

The arrest of the head of Baring Vostok in Moscow on suspicion of embezzlement of 2.5 billion rubles. at the bank "Vostochny"

The founder and senior partner of the investment company Baring Vostok Capital Michael Calvey (Michael Calvey) was detained on February 15, 2019 To Moscow in along with several other top managers of Baring. They are suspected of embezzlement from Vostochny Bank 2.5 billion (rubles fraud on an especially large scale). The relevant article 159, paragraph 4, of the Criminal Code provides for a penalty of up to 10 years' imprisonment. According to information provided on the official portal of courts of general jurisdiction, Moscow a court hearing on the choice of a preventive measure is scheduled for February 15. More. here

2018

IFRS net profit growth by 70% to RUB 7.4 bln

On April 30, 2019, Vostochny Bank announced the results of 2018 according to international financial reporting standards (IFRS). The bank's net profit for 2018 under IFRS increased by 70% and reached - 7.4 billion rubles ( compared with 4.4 billion rubles a year earlier).

Key financial indicators:

• The bank's assets for the year increased by 10.6% and as of January 1, 2019 amounted to 234 billion rubles.
• Profit before tax increased over the year by 66.5% to 8.9 billion rubles (in 2017 - 5.4 billion rubles).
• Net profit grew by 70% and amounted to 7.4 billion rubles (in 2017 - 4.4 billion rubles).
• Net margin increased by 34.2% compared to 2017 and amounted to 23.8 billion rubles (in 2017 - 17.7 billion rubles).
• The return on capital increased to 26.7% (in 2017 - 21.7%).
• Net interest margin increased to 13.4% (in 2017 - 12.2%).

The bank's profit was achieved due to business growth:

• The bank's total loan portfolio grew by 3.8 billion rubles. The main driver of growth was the development of retail lending: the loan portfolio of individuals grew by 12.3% (or 9.7 billion rubles).
• The cost of funding for the fixed-term portfolio of individuals as the main source of resources decreased from 9.0% to 7.2% from 2017. as of 2018, respectively.
• The bank's net interest income for 2018 (after changing reserves) increased by 102% or 6.4 billion rubles compared to 2017. The main growth factor is the development of the retail business: interest income on the portfolio of individuals increased by 14.9% (or 3.6 billion rubles). Also, in general, interest costs decreased by 7.5% due to a decrease in the cost of attracting resources.
• Net commission income of the bank increased by 25.3% compared to 2017. The main drivers of the growth of commission revenues of the bank in 2018 were: settlement and cash service, the sale of commission products and, in many ways, the guarantee business, which showed an increase of 32.4% (or 556 million rubles). Also, the increase in commission income of the bank is due to a decrease in expenses for remuneration to collection agencies by 60.2% (or by 530 million rubles) as part of the development of its own collection function.

Key Business Outcomes:

• The credit and card portfolio of Vostochny Bank grew by 8.4% in 2018. At the end of 2018, Vostochny Bank is confidently included in the top 5 Russian banks in terms of the volume of the credit card portfolio (with a market share of 4.3%).
• In 2018, Vostochny Bank issued 1.8 times more secured loans for large amounts (secured real estate) than in 2017. Bank Vostochny launched lending on real estate security more than two years ago. Now this loan is one of the most popular in the bank's product line.
• In 2018, the number of POS loans issued by Vostochny Bank increased by 85.6% compared to 2017. The partner base in the direction of POS lending in 2018 grew by more than 2 times.
• The bank's guarantee business shows impressive results. So, in December 2018, the portfolio of bank guarantees of Vostochny exceeded 100 billion rubles - this is 35% more compared to the beginning of 2018. Vostochny is one of the few banks that can close all SME needs to secure government orders: from lending to providing bank guarantees. For the second year, Vostochny Bank confidently confirms its top positions in the rating of banks in terms of the volume of guarantees issued under 44-FZ, ranking 1 among private banks and 3 among all Russian banks in 2018.
• Among the results of 2018 in the direction of SMEs (support for small and medium-sized businesses) is the growth of the customer base by more than 300%. Every month, representatives of SMEs open more than 2,000 accounts with Vostochny Bank. This is more than 4 times the average monthly indicators of 2017. During 2018, a product offer was formed for SMEs from Vostochny: a line of RKO, overdraft, non-bank services (online accounting, online cash registers, acquiring, etc.).

The financial result achieved at the end of 2018 gave us the opportunity to verify the effectiveness of the transformations being carried out in the bank. Vostochny Bank continues to successfully and consistently implement the business model chosen at the end of 2017, developing as a universal bank. Confidence in the correctness of our actions and loyalty of our customers allow us to maintain the financial stability of the bank in a difficult situation.

The network of branches of Vostochny Bank is the second largest among private Russian banks. As of April 2019, it includes more than 640 branches in Russia in 500 cities, 25% of which are located in the Far Eastern Federal District.

Taking into account the high results for 2018 and early compliance with the order of the Central Bank, the bank announces the following forecast for 2019: the expected organic growth of regulatory capital from 01.04.2019 to the end of 2019. - by 7.1 billion rubles to 35.1 billion rubles.

Customer base growth by more than 300%

On January 29, 2019, Vostochny Bank announced the summing up of 2018 in work with medium and small businesses. This direction is one of the priorities in the development of Vostochny as a universal bank. In 2018, Vostochny Bank attracted over 20 thousand additional small business customers. Active customer attraction during this period determined the growth of the customer base by more than 300%. The largest share of the bank's customers from among the SME segment are representatives of such industries as wholesale and retail trade, construction and decoration of residential and non-residential premises, freight transportation.

The geography of Vostochny's work with SMEs is constantly increasing, and if at the beginning of 2018 only 80 cities of presence were given the opportunity to become a client of the bank, then as of January 2019 the number of cities increased by 2 times. As of January 29, 2019, support for SMEs from Vostochny Bank is available in 170 cities of the Russian Federation. Note that the greatest activity in 2018 is demonstrated by entrepreneurs from Moscow and Moscow Region, Rostov, Vladimir Regions and Perm Territory.

According to the results of 2018, the most popular requests from SMEs to Vostochny Bank were cash settlement services (RKO), lending (in overdraft format) and acquiring.

At the same time, RKO is the leader among the most popular requests from small and medium-sized businesses. Every month, representatives of SMEs open more than 2,000 accounts with Vostochny Bank. This is more than 4 times the average monthly indicators of 2017.

Lending is the second most popular request from SMEs. In 2018, in this direction, Vostochny Bank relied on easy and affordable lending to entrepreneurs in the format of an overdraft - this is the minimum of documents and visits to the bank, the deadline for making a decision is only 1 day, credit funds can be issued without collateral and guarantees. During the year, an overdraft line was launched: overdraft compliment, which is provided at the time of opening a settlement account to customers who have applied for RKO; Overdraft Express - for those who already use a settlement account, Overdraft "Always in Plus," which is provided to customers using an online cash desk whose fiscal data is processed by the fiscal data operator (OFD), and the decision on the credit limit and the loan itself is made on the basis of cash desk turnovers. Most often, Vostochny Bank's credit funds go to such a goal as replenishing the working capital of the enterprise - over 30% of requests. The average loan amount is 10,030,000 rubles.

In third place in popularity is the request to connect acquiring. In 2018, Vostochny expanded the range of services for small and medium-sized businesses and offered trade and service enterprises the connection of acquiring from bank partners. The bank has formed a full line of acquiring solutions necessary for the entrepreneur: mobile, trading and Internet acquiring for each type of business.

Vostochny Bank is being transformed into a universal bank. We strive to provide our customers with technological, convenient and, above all, profitable services that best meet their expectations and needs. At the same time, we emphasized the multichannel and convenience of the client's work with the bank at any point of contact: whether it is an appeal through the Contact Center, in online format or directly through a manager in a bank branch. I also want to separately note Vostochny's special approach to working with representatives of SMEs - the bank seeks to offer customers not just a banking product, but a comprehensive solution. Moreover, this decision can be obtained as part of a single client appeal, that is, with one application to Vostochny Bank, an entrepreneur can receive several products at once. And the results of 2018 show that we have chosen the right direction. Entrepreneurs from all over the country have already appreciated our approach and are increasingly trusting us, and we promise to continue to do everything to justify this trust and predict the wishes of our customers.

Reimbursement to Taatta Bank customers

On July 19, 2018, Vostochny Bank, acting on behalf of the Deposit Insurance Agency (DIA) as an agent bank, began to accept applications and pay insurance compensation to depositors of Taatta Bank. Compensation is paid on deposits (accounts) of individuals, except those that were opened for entrepreneurial activity.

Recognition of the Central Bank of the Russian Federation as a significant credit institution

On May 14, 2018, Vostochny Bank was recognized by the Bank of Russia as a significant credit institution in the payment services market at the end of 2017, which reflects the bank's significant place in the lending market and a significant contribution to the development of the economy, including the development of the regional economy of the Far East.

Within the framework of the selected business model, Vostochny Bank is being transformed from retail to universal and today provides an increasing range of services to both citizens and organizations.

One of the priority areas of activity of Vostochny Bank is the development of the card business. The bank is constantly improving the quality and expanding the line of products related to the use of bank cards, which combine innovative technologies, security, simplicity and convenience in settlements. According to a study of the Russian credit card market in 2017, Vostochny Bank is one of the top 5 largest players in the credit card market. Today, Vostochny Bank takes 5th place in the credit card market with a portfolio of 46.2 billion rubles. The share of Vostochny Bank in the credit and card market of the Far East is - 8.23%.

In the Register of credit organizations recognized by the Bank of Russia as significant in the payment services market, PJSC KB Vostochny was included in April 2018. The Bank of Russia recognizes a credit institution as significant in the payment services market on the basis of such criteria as the share of transactions carried out by the bank using settlement and credit cards, the share of issued settlement and credit cards, the number of ATMs and terminals, the bank's share in the total volume of electronic money transfers made in the Russian Federation for a calendar year, etc.

Opening of the Center for Public Services for Business

On May 3, 2018, Vostochny Bank announced that, with the support of the Government of the Udmurt Republic, as part of the concluded cooperation agreement, it opened a Business Services Center on the site of its branch.

The center for obtaining public services from Vostochny Bank in one-stop mode by citizens and legal entities of the Udmurt Republic operates at 255 Udmurt St.

The cooperation agreement, signed in February 2018 by the Chairman of the Board of Vostochny Bank Dmitry Levin and the Head of the Udmurt Republic Alexander Brechalov, provides, in addition to creating a Public Services Center on the basis of the bank, Vostochny's active participation in the development of programs for small businesses in the region. In particular, the agreement provides for support by Vostochny Bank for innovative projects within the framework of the business incubator existing in the territory of the Udmurt Republic.

As of May 3, basic services of federal executive bodies, such as the Federal Tax Service, Rosreestr, the Federal Bailiff Service, Rospotrebnadzor, the Ministry of Emergencies, the Federal Property Management Agency, the Social Insurance Fund, are available to legal entities at the Vostochny Bank Service Center in Izhevsk; executive authorities of the Udmurt Republic, as well as information services of the Federal Corporation for the Development of Small and Medium-sized Enterprises - more than 25 types of services in total. In the future, the list of services provided for legal entities is planned to be increased. In the future, it will be possible to get all the information that the entrepreneur may need in the process of conducting activities, in particular, on state and municipal support measures, services of the SME corporation, as well as organizations expressing the interests of entrepreneurs.

State and municipal services will be provided without an additional commission - only state duties are paid.

"The creation of such Centers for the provision of public services for business on the sites of banks is another step towards simplifying administrative procedures for business, this is a necessary element of the infrastructure for supporting entrepreneurship. Small business for Udmurtia is one of the priority areas for the development of the region. And in supporting the small business of the Republic, we see an important strategic partner at Vostochny Bank, "commented Mikhail Tumin, Minister of Economy of the Udmurt Republic.

Obtaining a Central Bank license to manage funds

2017: Profit 4.3 billion rubles

At the end of 2017, the profit of Vostochny Bank under IFRS amounted to 4.380 billion rubles, compared with 3.198 billion a year earlier. Profit growth confirmed the effectiveness of the business model of the combined bank and the bet made on the transformation of Vostochny from a retail monolayer to a universal bank.

The bank's profit was achieved due to an increase in lending in 2017 and a decrease in the cost of funding. The obtained organic profit made it possible to absorb losses of previous years and now gives a stable reserve for further growth. At the same time, the adopted business model does not imply explosive growth in the loan portfolio, since today the bank is focused on lending to high-quality risk-free borrowers.

• The bank's net interest income for 2017 increased by 3.5 billion rubles or 23.9% compared to 2016 due to the development of retail and corporate lending, as well as due to the growth of the securities portfolio. At the end of 2017, net interest margin was 12.7%, showing an increase of 1.2 percentage points compared to 2016.
• The bank's net commission income increased by 125.9% compared to last year, largely due to the retail and guarantee business, which showed an increase of 1.7 billion rubles.
• The bank's assets for the year increased by 44% and as of December 2017 amounted to 211.6 billion rubles. The growth of assets was observed, including due to the merger with Uniastrum Bank.
• The bank's equity under IFRS increased in 2017 by 47% to 23.4 billion rubles.
• The volume of raised funds of customers in 2017 increased by 69% to 166 billion rubles.
• Throughout 2017, the bank worked on the quality of the loan portfolio. The share of retail loans with a delay of 90 + (NPL 90 +) in the total loan portfolio decreased in 2017 by 6% or almost 700 million rubles. Taking a conservative approach in lending and thanks to effective risk management, the risk value of the retail portfolio in 2017 was 8.2%, having decreased by 2 percentage points from the level of 2016.

2016: Profit 3.2 billion rubles

Vostochny Bank published in April 2017 IFRS for 2016, reporting a significant improvement in financial results. At the end of the year, the bank earned 3.2 billion rubles net profit against a loss in 2015 in the amount of 10.67 billion rubles. There is also a significant improvement in terms of problem debt: its volume over the year tripled, to 10.5 billion rubles, and reserves - from 29.6 billion to 9.8 billion rubles. The bank wrote off bad loans for 23 billion rubles, the size of the loan portfolio before deducting reserves for the year decreased by 28%, to 85 billion rubles.

However, according to Kommersant, despite the improvement in financial performance, the issue of recapitalization of the bank remains open. In its opinion, the auditor of Pricewaterhauskupers Audit indicates "there is significant uncertainty that may raise doubts about the ability of the group to continue its activities continuously." According to the bank's statements, "significant uncertainty" is due to the fact that "if management cannot significantly increase tier 1 capital in 2017, this may raise significant doubts about the group's ability to continue its activities." The bank is in the process of agreeing on the results of an audit conducted by the Central Bank in 2016.

2015

Baring Vostok increases its stake in the bank's capital from 67% to 74.4%

The largest investment fund, Baring Vostok, increased its stake in the capital of Vostochny Express Bank from 67% to 74.4%. The share of the fund is RussiaPartners equal to 15.3%. The shareholders included the acting chairman of the bank's board Alexei Kordichev and financial director Konstantin Rogov (3% and 1%, respectively), which confirms the confidence of top management in the successful change and development of the business model. Having a minority stake in key executives improves the quality of corporate governance and guarantees the adoption of correct and more balanced decisions. Sergey Vlasov and Igor Kim withdrew from the list of shareholders in order to focus on their own projects.

Earlier it was mentioned that more than 50% of Vostochny Design Bureau's shares belonged to large institutional investors. Among them are:

• IFC - World Bank Group International Finance Corporation (14%),
• as well as Baring Vostok private equity funds (33.6%) and
• Russia Partners (6,9%).

Vostochny Express Bank is a bank in the Far East, specializes in consumer lending. For 2015, the share of loans to individuals is 96% of the loan portfolio. The Bank is a member of the Deposit Insurance System (CER).

Vostochny Express Bank approved by the Central Bank to place NPF funds

Vostochny Express Bank was included in February 2015 in the list of 95 credit organizations that meet the requirements of the Central Bank of the Russian Federation for the placement of pension savings funds by non-state pension funds (NPFs). Savings are formed as part of compulsory pension insurance programs, as well as housing support for military personnel (military mortgage).

The list includes banks that have a general license of the Central Bank of the Russian Federation for banking operations and own funds (capital) in the amount of at least 5 billion rubles. A significant criterion is also the absence of a ban on attracting deposits and opening individual accounts.

Vostochny Express Bank has been a member of the Mandatory Deposit Insurance System since 2005 (No. 552 according to the register), and is also included in the list of 77 DIA agent banks.

In 2015, Vostochny Express Bank was included in the list of the most expensive international brands according to the results of the Brand Finance study. The brand cost was $164 million.

Capital size 31 billion rubles, 1200 points of sale, 9,500 employees

The size of the capital of Vostochny Design Bureau as of January 1, 2015 exceeds 31 billion rubles, the size of the loan portfolio - more than 184 billion rubles, the volume of deposits of individuals - more than 114 billion rubles. The bank has one of the most extensive regional networks in the Russian market - more than 1200 sales points of various formats operate in all federal districts of the Russian Federation. The number of employees of the Vostochny Design Bureau exceeds 9,500 people, who serve more than 3.2 million customers. The high level of reliability of Vostochny Design Bureau is confirmed by credit ratings of reputable international and national rating agencies (Moody's, Fitch Ratings, Expert RA).

2014: Results of the work of Vostochny Design Bureau with the Joint Credit Bureau (OKB)

OJSC Vostochny CB summed up the Bank's work with the services provided by the Joint Credit Bureau (JCB). The following services have been successfully implemented:

• Credit reports;
• Triggers - notifications of changes in borrowers' credit histories;
• Scoring - integral assessment of the borrower;
• Benchmarking - tracking the current situation in the lending market of the Russian Federation.

These services are used to work with the existing loan portfolio and risk management when issuing new loans. Credit reports and the Scoring Bureau contributed to an increase in the accuracy of assessing the credit behavior of a potential borrower: additional information allowed to 1.5 times increase the effectiveness of blocking expenditure operations under untilized defaulting limits; the accuracy of the likely default estimate has been increased to 90-95% (Gini Index has risen from 55% to 70%).

The Bank has been using the Triggers service since 2013 in terms of collecting overdue debts, since 2014 - in terms of cross-sales and managing the limit of cardholders. As a result, the efficiency of marketing campaigns aimed at working with loyal customers of the bank increased by 5%. Savings in operating costs of the Bank at the initial stage of using OKB services amounted to 5%, the expected effect - up to 15%.

Also, this year, the Bank joined the Benchmarking service, which allows it to quickly track the dynamics of changes in the market in the face of a difficult macroeconomic situation, high competition and the expansion of retail credit banks.

2012

Assets growth by 163% up to 202 billion rubles

Assets of Bank on 01.01.2013 ^[8] were 202,602.5 million rubles (2011: 136,290.5 million rubles), the growth rate of assets was 163% for reporting year (2011: 148%). The main asset growth occurred under the following items:

• net loan debt - by 72,244 million rubles (2011: 37,069 million rubles),
• net investments in securities estimated at fair value through profit or loss - by 3,559 million rubles (2011: 2,740 million rubles),
• funds of credit institutions in the Central Bank of the Russian Federation - by 4,088 million rubles (2011: 2,104 million rubles),
• cash - by 1,969 million rubles (2011: 2,343 million rubles).

In the structure of liabilities 75.7% (168,433 million rubles) (2011: 78.6% (107,160 million rubles) falls on the funds of individuals and non-credit organizations. The Bank's priorities have traditionally been given to attracting deposits. In 2012, the Bank's deposit portfolio grew by RUB 51.5 billion (2011: RUB 31.8 billion), a record since 2005. The total volume of the deposit portfolio increased in the reporting period by 55% for the year (2011: 51%) and amounted to 145.7 billion rubles at the beginning of 2013 year (at the beginning of 2012 year: 94.3 billion rubles ).

Opening dozens of IT vacancies

In July 2012, several dozen IT vacancies were opened in Vostochny Design Bureau both in the capital and in regional branches. Apparently, the bank is preparing for a large-scale implementation of IT systems on the Oracle platform.

The most attractive is the position of the director of the design center of the information technology department of Vostochny Design Bureau with an estimated salary of 250 thousand rubles. The responsibilities of this officer will include the organization of the work of the project center by IT departments serving technological development projects, the implementation of the project management methodology and project pools, as well as a specialized project management software product. For applicants, higher education, experience in organizing and managing the project office are required.

The bank is also looking for the head of ^[9], offering this specialist a salary of 180 to 250 thousand rubles. Job responsibilities: development and support of Siebel, performance of tasks related to the work and development of Siebel.

Candidates require extensive technical knowledge, in particular, Oracle DB, Oracle BI systems, SQL query language at the expert level, Siebel Tools development tools, technical English and much more.

The Vostochny Design Bureau has opened vacancies for the chief specialist of the information technology department (duties - ensuring the uninterrupted functioning of terminal equipment), the system architect of the data warehouse, the system architect for solutions based on Microsoft products, the head of the CRM system development direction (Siebel CRM), the head/business architect of the enterprise data warehouse development direction. Salaries for these specialists are discussed at an interview.

1991: Foundation of a bank in the Amur Region

The bank was founded in 1991 in the Amur Region.

Notes