MTS Bank

MTS Bank is a commercial bank that provides services to individuals and companies. As of March 2024, it is one of the 30 largest banks in Russia in terms of assets. At this time, in its strategy, MTS Bank relies on the rapid growth of retail business and services for small and medium-sized businesses.

Financial performance

Main article: Financial indicators of MTS Bank

Digitalization

2021: New Vice President for IT - Alexey Klepikov

On March 1, MTS-Bank announced the appointment of Alexei Klepikov to the post of vice president, head of the information technology cluster. His area of ​ ​ responsibility includes issues related to the strategy of information technologies of MTS-Bank, including the joint department of IT Bank and IT fintech MTS. Read more here.

2017: BaaS Cloud Services - Banking as a Service

Banking-as-a-Service (BaaS) - cloud banking modelData ^[1]

Banking procedures and products are applications:

• payment application
• application for providing information on accounts
• Personal Finance Application (PFM)
• anti-fraud app

The task of IT is to turn Banking Operations into interfaces of internal and external services.

• Pay conveniently: Sites of MTS, MTS Bank and partners, Mobile applications: linking bank cards and cards of third-party issuers, P2P transfers, payment for supplier services, online lending, services for terminal owners and franchise networks
• Buy Safely: 3D Secure Payguide, NFC, PayPass/PayWave, Apple Pay, Samsung Pay, Android Pay, Internet Acquiring, Terrestrial Equaring
• Bank around: Full-fledged Remote Service System: account and card management, applications for bank services, payments, repayment of loans, P2P transfers, transfers between accounts, foreign exchange transactions, SMS and Push notifications linked to geolocation

Types of Cloud Services

MTS Bank uses three types of services: SaaS and PaaS (for the development of financial services) and IaaS for the development of development environments and continuous integration.

Usage models

• Private cloud: Physically allocated resources for the client located in the data center of MTS Bank. Resources are not shared between different clients
• Public cloud: Logically allocated resources for MTS Bank placed on MTS equipment (in MTS cloud)
• Hybrid cloud: This configuration involves the sharing of leased logical resources in the MTS data center and its own dedicated equipment in the Bank's data center. Embed Cloud Partner Services into Native Applications and Interfaces

Basic model of using cloud services in MTS Bank - public and hybrid cloud

History

2024: Going public

On April 26, 2024, MTS Bank announced an initial public offering (IPO) of ordinary shares on the Moscow Exchange. As of this date, as noted, the placement became a record Russian IPO in terms of demand and the number of investor applications.

The price range of the procedure was determined from 2350 to 2500 rubles, and the placement took place along its upper border. The market capitalization of MTS Bank, taking into account shares issued as part of the IPO, at the time of the start of trading amounted to approximately 86.6 billion rubles. Investor demand was about 15 times higher than the IPO at the upper end of the price range. As a result, 11.5 billion rubles were attracted, taking into account the stabilization package. In total, during the procedure, more than 200 thousand applications were submitted from retail and institutional investors for a total amount of about 168 billion rubles.

MTS Bank announced an IPO

The offering consisted solely of cash-in shares. The share of the bank's shares in free float (free-float) according to the results of the IPO amounted to about 13.3%. The credit institution, its majority shareholder and affiliates have assumed obligations related to the restriction on the alienation of shares within 180 days from the date of the start of trading on the Moscow Exchange. As part of the IPO, a stabilization mechanism of up to 1.5 billion rubles has been structured, which will be valid for 30 days after the start of trading. The total placement on retail investors amounted to about 5 billion rubles, on institutional investors - 6.5 billion rubles.

The funds raised will be used to implement the growth strategy and further scale up the bank's high-margin retail business. The shares are included in the first level of listing of the Moscow Exchange with the ticker symbol MBNK and ISIN RU000A0JRH43.^[2]

2023

MTS Bank sued millions from Fitch rating agency for "unjust enrichment"

MTS Bank sued 34,445 pounds sterling (4.3 million rubles) from the Fitch rating agency for "unjust enrichment." This was reported on August 9, 2023 by Vedomosti with reference to the corresponding decision of the Moscow Arbitration Court . Read more here.

Blocking assets for 9.6 billion rubles due to US and British sanctions

MTS Bank blocked assets with a total book value of almost 10 billion rubles, follows from the reports of AFK Sistema, which 49.9% owns the owner of the credit institution telecommunications operator MTS. The materials were released by the corporation on April 10, 2023.

Currently, MTS Bank cannot dispose of some assets (balances in nostro accounts in South Korea). The current book value of blocked assets as of the date of issue of these consolidated statements is 9.6 billion rubles, - says the financial documentation of the investment company.

At the end of February 2023, blocking sanctions of the United States and Britain were introduced against MTS Bank.

MTS Bank has become the subject of so-called "blocking" sanctions (asset freezing), supported by the United States and Great Britain. Among other things, such sanctions require third parties in the United States and Great Britain, including banks, to block or freeze the assets of MTS Bank in these organizations, or otherwise block settlements sent to MTS Bank or MTS Bank to their counterparties, the Sistema reports emphasize.

In addition, the group notes that the credit institution does not settle in US dollars, Turkish lira, Omani rials, Swiss francs and pounds sterling. In mid-March, the bank stopped providing the client with transfer opportunities for Uzbek sum, and at the end of March - according to the Azerbaijani manat.

The reports of AFK Sistema say that MTS Bank has applied for a license, which will allow transferring the balances on these accounts to Russian jurisdiction. The likelihood of obtaining such a license is estimated as high, the corporation said.^[7]

Obtaining a license in the UAE

The Central Bank of the United Arab Emirates issued a license to the Russian MTS Bank. Information about this in early February 2023 appeared on the regulator's website.

According to the Financial Times newspaper, MTS Bank became the first foreign bank in several years to receive a license in the UAE. It is known that the document was issued in 2022. The license will facilitate access to bank accounts for Russians. It is reported that in the current geopolitical situation, many citizens of the Russian Federation moved to the UAE. At the same time, they had difficulties opening accounts in banks providing services in the territory of this state. The license issued to MTS Bank will solve these problems. In addition, the bank will become a new channel for money to enter the country.

Harsh Western sanctions have Russia not yet directly affected the telecommunications infrastructure, which means that MTS does not face the same restrictions as some other banks and energy companies, reports. Reuters

According to Frank RG, Banki.ru and Retail Finance Awards 2022, MTS Bank is in the top 40 Russian banks. The number of active users of payment and digital services is almost 12 million in the MTS ecosystem, of which over 3 million are bank customers. In December 2022, it became known that MTS Bank intends to open a branch in Dubai. Then it was said that the bank intends to develop in the UAE not only settlement operations, but also other areas.

After the introduction of massive sanctions and the closure of correspondent relations with Western banks, Russian credit organizations began to actively open accounts in banks in the Middle East, Central and Southeast Asia. The task is to develop the activity of Russian enterprises in the Middle East and attract Middle East capital to the Russian Federation, the Kommersant newspaper reported. [8]

2022: Top manager of MTS-Bank convicted of selling 5.6 thousand customers

On July 28, 2022, it became known that the Verkh-Isetsky District Court of Yekaterinburg sentenced three men in a criminal case on the disclosure of personal information about bank customers. This was reported by the Prosecutor's Office of the Sverdlovsk Region.

The court sentenced the head of Moscow the MTS-Bank additional office Andrey Vamich to three years and six months in a strict regime colony and a fine of over 5 million rubles. for selling information about customers to fraudsters. bank More. here

2020: Partnership with ServiceHub to launch Lucros investment platform

On November 5, 2020, ServiceHub announced the launch of the Lucros investment platform in partnership with MTS Bank. Read more here.

2019

AFK Sistema completely withdrew from the bank's capital

In December 2019, AFK Sistema Vladimir Yevtushenkov completely withdrew from the capital of MTS Bank, 99.7% of whose shares came under the control of MTS.

As a result of the transaction, 4.5% of the bank's shares were transferred from AFK Sistema to Mobile TeleSystems B.V., which is controlled by MTS. The cost of the package amounted to 1.4 billion rubles. The deal was approved by the MTS Board of Directors on December 19.

"Consolidation will allow us to accelerate the launch of new products on the market and is aimed at further increasing the penetration of financial services among MTS customers," said Yevtushenkova, a representative of MTS[9].

The mobile operator has been increasing its share in MTS Bank for the past six years. In 2013, he received a block package in it (about 25.1%), having bought out an additional issue for 5.1 billion rubles. In July 2018, the operator became the controlling shareholder, spending 8.3 billion rubles on the acquisition of 28.63% of shares. In February 2019, MTS brought its share to 95%, the transaction amount amounted to 11.4 billion rubles.

Appointment of Sergei Smirnov as Vice President of Strategy

On September 30, 2019, it became known that Sergey Smirnov was appointed Vice President for Strategy of MTS Bank. Read more here.

MTS brought its stake in MTS Bank to 95%

Russian telecommunication MTS On February 12, 2019, the operator and digital service provider announced the purchase through its 100% subsidiary Mobile TeleSystems B.V. 39.48% of MTS-Bank PJSC shares for 11.4 billion rubles from PJSC, AFK Sistema a public Russian diversified holding company, the largest shareholder of MTS and its subsidiaries.

As a result of the transaction, MTS "share in MTS Bank's capital increased from 55.24% to 94.72% (including the share of MGTS PJSC in the amount of 0.24%), while Sistema's share accordingly decreased to 5.0%.

The acquisition of a stake in the bank is necessary to successfully achieve cross-synergies between telecom and banking products, accelerate the launch of projects and implement a financial services strategy aimed at building a single digital ecosystem of innovative services for customers, - said MTS President Aleksei Kornya. - Due to close integration, MTS Bank entered the trajectory of sustainable development: in 2017 it returned to profitability, and the preliminary results of 2018 demonstrate further growth and improvement of operational and financial indicators.

Earlier, MTS received all the necessary regulatory and corporate approvals for the deal. The decision to purchase MTS Bank shares was made on the basis of recommendations of the special committee of MTS independent directors.

2018

Doubling of the client base, including at the expense of MTS subscribers

In 2018, MTS Bank doubled its customer base, including at the expense of MTS subscribers, and today serves about three million clients of financial services. The launch of products within the framework of the bank's digital strategy into new digital channels, improving the quality of customer service and using the capabilities of the Big Data telecom operator made it possible to double the sales of credit products in the retail segment.

In 2018, MTS-Bank mainly specialized in retail lending.

• MTS Money Wallet
• Integration of financial services of mts and mts of the bank
  • Integration of mobile applications and personal accounts "Easy Payment" and MTS Bank
  • Combining all financial products within a single site

• RTK
  • Transfer of financial services to RTK to MTS Bank
  • Installation of MTS Bank software on terminals in RTK

• NFC - contactless transactions
  • HCE Card Issue - Cloud-based data storage and exchange.
  • "MTS Mobile Pass" - identification of an employee by touching a smartphone in an electronic bandwidth system
  • Samsung Pay, Apple Pay

• Payments
  • Auto payment for services (housing and communal services, etc.) from a bank card
  • Transfer of payments from bank cards to MTS Bank acquiring
  • Microloans for Mobile Commerce Services
  • Provision of mobile commerce services to users of phones of legal entities
  • Creation of own aggregator based on STREAM
  • "Mobile insurance" - payment for insurance services from a mobile phone using the USSD command

• Payment in pyrolysis oil
  • Mobile POS Terminals
  • Offline payment from the subscriber's account in trading enterprises.
  • MTS wallet reception service Money on partner storefronts

• Translations
  • Transfers in MTS Connect messenger
  • Cash transfers with cash distribution at RTK offices, MTS Bank ATMs, Russian Post offices, Western Union offices

MTS bought MTS-Bank

The telecommunications operator Mobile Telesystems (MTS) increased its stake in MTS-Bank to control. As follows from the message of MTS, its "daughter" Mobile Telesystems B.V. bought 28.63% of the bank's shares for 8.27 billion rubles. As a result, MTS "share in MTS-Bank increased from 26.61% to 55.24%.

The seller was AFK Sistema, the controlling shareholder of MTS. Until recently, AFK Sistema also controlled MTS-Bank directly. Now the share of direct ownership of the corporation in the bank has decreased from 71.87% to 43.24%^[10].

2017: Bank - part of MTS ecosystem

In 2017, MTS Bank is not only a service provider of banking services, but also a consumer of services, in particular cloud services, available both within the MTS group and on the foreign market.

2016: World-Maestro Cards Release

In

early 2016, MTS bought out part of the additional issue of the bank's shares for 1.3 billion rubles. At the end of the same year, MTS took part in another additional issue of MTS-Bank shares, paying 2.77 billion rubles for this. After all these transactions, the size of MTS's share in MTS-Bank slightly changed. Thus, since 2013, MTS has invested 21.88 billion rubles in MTS-Bank.

On July 4, 2016 , MTS Bank and the National Payment Card System (NSPK) announced the release of Mir-Maestro cards on the Russian-made microprocessor platform.

The Mir card issue project was implemented with the participation of the Micron group, which is part of the industry holding OJSC RTI Group (AFK Sistema).

The pilot project of the issue began on June 30, 2016. 

MTS Bank's Mir-Maestro card allows you to pay and withdraw cash at trade and service enterprises and ATMs that accept Mir cards in Russia and Maestro cards in Russia and in other countries. For Mir-Maestro cardholders, there is no commission for servicing during the entire validity period of the card, as well as a commission for receiving their own funds at MTS Bank ATMs and Russian ATMs included in the network of preferential cash receipt. It is planned to launch a service for replenishing personal accounts with MTS subscribers from Mir cards through payment pages on the operator's website.

The microcontroller chip for banking applications was developed and manufactured by NIIME and Micron OJSC on the basis of the Russian MIKPay card platform in 2015.

The Russian bank chip meets international quality standards and works on the operating system created by Micron specialists. To ensure a high level of security and data safety, the chip supports all basic cryptographic algorithms, is resistant to climatic and electrical influences, has a guaranteed information storage period of up to 10 years or 100 thousand rewriting cycles. Microcontroller "Micron" passed tests for functionality in NSPK and is certified by MasterCard for use in international payment systems.

We consider this project both from the point of view of the importance of developing the domestic Russian payment system, and through the prism of strategic interaction with our partner Micron, which ensured the implementation of a high-tech project. Currently, MTS Bank accepts and services Mir cards in its own ATMs and in the acquiring network. We hope that the launch of the issue will make the Russian payment card available and popular among our customers.  Eduard Issopov, Deputy Chairman of the Management Board of MTS-Bank PJSC

Today, our partners and I present an important  project for the development of the Mir payment system - a national card with a Russian microprocessor. Created using the best domestic developments, the Mir-Maestro card  of MTC Bank can work not only in the Russian, but also in the international infrastructure, while users have access to all the functions of the card both in the devices of our country and abroad. The use of Russian technologies in Mir maps will immediately adapt additional services on the map to the needs of various regions of our country, which will make it relevant and in demand among bank customers. Sergey Radchenkov, Commercial Director of JSC NSPK

Thanks to the use of the Microna chip, bank cards of the national payment system become really completely Russian. Our joint project with MTS Bank and NSPK is an excellent example of real import substitution and a clear confirmation of the high level of Russian microelectronic and banking technologies. Gulnara Khasyanova, General Director of NIIME and Miwkron OJSC

2014: MTS invested 3.64 billion rubles in the bank

MTS, together with AFK Sistema, participated in several additional issues of the bank's shares. In 2014, MTS invested 3.64 billion rubles in the bank.

2013: MTS acquired 25.1% of MTS Bank shares for 5 billion rubles

In early 2013, MTS acquired a 25.1% stake in MTS-Bank for RUB 5.09 billion.

2012: IBRD name changed to MTS-Bank

In February 2012, JSC JSCB "MBRD" announced the change of the previous name and renaming to OJSC "MTS-Bank," taking as a basis for further development the MTS brand. From the captive bank AFK Sistema, IBRD wants to turn into a retail player, renamed MTS Bank. The bank plans to use the branches of the mobile operator as points of sale. On February 16, 2012, the Bank received from the Bank of Russia registered amendments to the charter with a new name, a general license and a certificate of entry into the Unified State Register of Legal Entities. From that moment, MTS Bank officially received a new name.

The name change is the first stage in the rebranding of the bank. The new development strategy of the bank until 2016 provides for the expansion of the loan portfolio and the expansion of the line of banking products for private customers, primarily through the retail network of the mobile operator MTS, whose brand formed the basis for the name of the bank. In turn, the operator will be able to provide comprehensive solutions based on the integration of operator and banking services, such as mobile commerce, the development of contactless payments using NFC technology and offer a wide range of banking services in its retail.

According to Elena Voronina, Deputy Chairman of the Board of the IBRD, by 2016 the share of retail in the balance sheet is planned to be increased to 60% instead of today's 20%.

Along with the introduction of the card project, MTS-Bank will continue to work in other retail niches. So, in 2011, the IBRD again began to issue mortgage loans, the work with which was suspended during the crisis. The share of mortgages in the retail portfolio is planned to be increased to 60% by 2016.

"Now the volume of mortgage loans on the balance sheet is small, since we did not work in the mortgage market for some time, and the bank sold high-quality loans," E. Voronina noted.

The bank is part of the largest Russia corporation in the CIS and AFK. " System The banking group has an extensive branch network, in addition, it includes two subsidiary banks of JSC Dalcombank (g.) Khabarovsk and East-West United Bank (). Luxembourg

The bank's partners are not only enterprises included in the structure of AFK Sistema, but also a number of large companies of various industry orientations.

2011: Launch of MTS-money payment system and lending in MTS sales offices

In 2011, MTS began to cooperate with the IBRD: the MTS-money payment system was launched. At the same time, IBRD and MTS agreed on the division of profits from MTS-Money in the ratio of 70% to 30%.

In 2011, a joint MTS project of targeted express lending was launched in 2,400 sales offices of the MTS network and the MTS Money credit bank card project. The loan portfolio of the joint project reached US $16 million at the end of the fourth quarter of 2011 Russia. At that time, another bank offering its services in mobile salons is operating. Svyaznoy Bank He, like MTS the -bank, bets on a universal plastic card. "Due to the presence in 2,400 mobile communication centers "Coherent" , in a short time we gained access to customers throughout Russia," said Yevgeny Davydovich, deputy chairman of the board of Svyaznoy Bank. In October 2011, the bank turned a year old, the loan portfolio as of September 1, 2011 amounted to 7 billion rubles, the number of clients - more than 700 thousand people.

In December 2011, JSC Dalcombank started issuing bank cards of the UnionPay payment system.

1993: "Moscow Bank for Reconstruction and Development" founded

AKB "Moscow Bank for Reconstruction and Development" (OJSC) was established in 1993. The bank belonged to AFK Sistema.

Notes