Rossiya Bank

Rossiya Bank (Bank Rossiya, in Russian: Акционерный коммерческий банк Россия, АКБ Россия) is a Russian joint stock bank founded on June 27, 1990. The company's headquarters are in Saint Petersburg.

History

Communist Party ownership

On August 23, 1990, a secret memorandum from Vladimir A. Ivashko, who was Gorbachev's deputy general secretary, was issued to organize the transfer of CPSU funds, CPSU financing and support of its operations through associations, ventures, foundations, etc. which are to act as invisible economics.[2][3] Bank Rossiya was one of the hundreds of entreprises that CPSU financiers used to funnel the party gold away.[5]

In 1990, the CPSU committee of the Leningrad Oblast became Rossiya Bank largest shareholder (48.4%),[6]

Capital outflows from the Soviet Union and Russia

In March 1992, the Yeltsin government contracted Kroll Associates to track down and find very large sums of money that had been removed from the Soviet Union prior to the August 1991 putsch on the Russian White House.[38] In 1992, First Deputy Prime Minister Yegor Timurovich Gaidar said, "Last year saw large-scale privatization by the nomenklatura, privatization by officials for their own personal benefit."[39] Gaidar called the Communists and KGB officials criminals and that a "a vigorous search" for the money trails from state-owned capital had flowed abroad virtually unchecked before the collapse of the Soviet Union in the summer of 1991.[38] On March 15, 1992, the Russian government froze all capital outflows from Russia.[38] On April 4, 1992, Yeltsin issued “The fight against corruption in the public service” decree to provide for maximum transparency of officials and their institutions by providing a listing of their financial obligations, liabilities, securities, income, bank deposits, real estate holdings and their personal property and to prohibit officials from owning businesses.[40] In April 1992, Kroll Associates began their investigations with Joseph Serio heading the Kroll Associates efforts in Moscow. Also, Joseph Rosetti, the vice chairman of Kroll Associates, was in Moscow to assist.[38] The Kroll Associates determined that more than $14 billion in 1991 real dollars had been transferred from Switzerland to New York prior to the August 1991 putsch.[39] Also, the Communist Party of the former Soviet Union along with other government agencies, such as the KGB, had transferred more than $40 billion in 2014 real dollars out of the country. The assets of the Vnesheconombank were frozen during the investigation.[39] However, numerous transactions occurred to bypass the capital flow restrictions often with the British Barclays Bank in Cyprus acting a money laundering center for public officials from Saint Petersburg and Moscow.[39] According to Valery Makharadze, the government's chief inspector, many joint stock companies were formed to provide an illegal means for capital outflows from Russia, such as the Leningrad Association of Joint Ventures and KOLO.[39] Numerous officials became wealthy Russian oligarchs including numerous former KGB officials, prominent Communists such as Oleg Belyakov and other former Communists who headed the party Central Committee department that dealt with the defense industry, as well as Leonid Kravchenko, who was the former head of the state television and radio company.[39] Jules Kroll, the head of the Kroll Associates, uncovered hundreds of illicit transactions with massive capital outflows.[41] This outflow of capital from the Soviet Union and Russia directly contributed to severe economic conditions in Russia during Boris Yeltsin's second term

During the Putin administration

As of January 1, 2005, its major shareholders were Yuriy Kovalchuk with 37.6%, Nikolai Shamalov with 9.7%, Dmitry Gorelov with 9.7% and Alexei Mordashov's Severstal group with 8.8%.[6][7][13] As of 2006, its major shareholders were Yuriy Kovalchuk (30.4%), Dmitry Gorelov (12.58%), Nikolay Shamalov (12.58%), JSC Transoil CIS (9.54%), JSC Severstal Group (7.15%), JSC Accept (3.93%) – owned by grandson of Vladimir Putin's uncle Michael Shelomov,[42] JSC Relax (3.65%), "Assistance to Business Initiatives" Non-Commercial Enterprise (3.08%), Russian Federal Property Fund (2.93%).[43]

On December 28, 2006, Fitch Ratings assigned the bank negative ratings (Long Term issuer Default rating B−, Short Term rating B, National Long Term rating BB− (RUS)[44]). As a subsidiary of the bank, ABRos Investment Company, had signed a non-transparent deal aiming to buy a considerable share of the Ren TV Media Holding (see below).[45] During the 2012–13 financial crisis in Cyprus, more than one third (26.3 billion rubles) of Rossiya Bank's total cash (85.4 billion rubles) was frozen in Cypriot accounts.[46] On June 28, 2013, its major shareholders were Yuri Kovalchuk 30%, Dmitri Gorelov and Nikolai Shamalov 10.5% each, Gennady Timchenko 8%, Gazprom about 16%, Alexei Mordashov 6%.[46] In October 2021, Svetlana Krivonogikh had a 3% stake in Rossiya Bank.[47]

The U.S. government has characterized Rossiya Bank as Putin's personal cashbox. The Pandora Papers leak revealed that the bank built a network of shadow companies that kept offshore wealth for Russian elites.[48]

Sanctions

On March 20, 2014, the United States Government Office of Foreign Assets Control added Rossiya Bank to the Specially Designated Nationals List (SDN) as part of sanctions taken in response to the annexation of Crimea by the Russian Federation, placing restrictions on US trade with the bank.[49][50][51][52] Visa and Mastercard stopped processing the bank's payment as a result.

In response, Vladimir Putin announced that he would open a ruble-only account with Bank Rossiya and would make it the primary bank in the newly annexed Crimea as well as giving the right to service payments on Russia's $36 billion wholesale electricity market – which gave the bank $112 million annually from commission charges alone.[53] Bank Rossiya also announced plans to expand into the Crimean market, becoming the first major Russian bank to do so.

Subsidiaries

As of 2005, the bank is a shareholder of the following companies[71][72]):

In January 2005 it turned out that ABRos, a subsidiary of the bank, and Accept, one of its shareholders, held a 49.97% share and a 13.5% share of the insurance group SOGAZ Ltd., respectively[75][76] after a 49.979% share of the SOGAZ group had been sold by the Russian gas giant Gazprom to an unnamed purchaser for 1.69 billion rubles on July 26, 2004,[77] and in August 2004 Gazprom had sold 26% more of SOGAZ for 879.3 million rubles.[78][79]

In November 2005 ABRos Investment Company (chairman of the board of Directors since September 11, 2006: Lyubov Sovershaeva)[80] purchased a 37% share of the Petersburg TV and Radio Company.[81][82] Also it owns a considerable share of the Media Holding Ren TV (as of December 2006,[83]) On December 18, 2006 Lyubov Sovershaeva also became the chairman of the board of Directors of the Ren TV Media Holding (replacing Alexey Germanovich, a Severstal Group representative).

As of 2008 and later in 2016, Rossiya Bank has large investments in National Media Group both directly and indirectly through its 100% ownership of Abros which has a stake in National Media Group.[5][84][85]

In August 2010, Sobinbank, an asset of Gazenergobank that had been formed by Alexander Mamut, was acquired by Rossiya Bank when it took over Gazenergobank.[86]

In the summer of 2012, ABR Management was established to manage Rossiya Bank's assets.[86]

In 2016, Rossiya Bank's subsidiaries included Channel One, Channel 5, and Ren TV of the National Media Group CJSC, the leasing group Zest, and Sogaz OJSC.[86][87]

In 2018, Rossiya Bank, Yuri Kovalchuk and Nikolai Shamalov through their investments in the National Media Group and its 100% ownership of Synerdzhy LLC and Otkrytie TV LLC which is 100% owned by Media Alians (or Alyans) LLC in which Rossiya Bank has an 80% stake, have close relationships with the John C. Malone associated Liberty Media.[85]

According to a 29 September 2018 article in RBC, Rossiya Bank through Sobinbank in 2017 absorbed the Crimea based Genbank, which is associated with Evgeny Dvoskin and had had 190 branches on the peninsula which is second only to Russian National Commercial Bank (RNCB) on Crimea.[90][91][92] Following this support from Rossiya Bank through Sobinbank, Genbank gained a much larger presence on Crimea according to Pavel Samiev who is the director of the BusinessDrom analytical agency .[90]

Beginning on January 20, 2020, the processing center of JSC AB Russia provides processing services for the issue of bank payment cards and support for acquiring projects of Evrofinance Mosnarbank.[99]

JSC ABRos Investment Company (100%)

JSC Alfa Invest (100%)

JSC ABR Trust (100%)

JSC ABR Security Company (100%)

JSC ZEST (100%)

JSC Sankt-Peterburgskie Vedomosti Editorial House (20%, increased to 35% in 2005)

JSC newspaper Sankt-Peterburgskie Vedomosti (20%, increased up to 35% in 2005[73][74])

JSC Fund for Regional Development of St. Petersburg (15%)

JSC Center for Innovative Management (10%).

JSC Red Chemist (7.36%).

type	Public company joint stock company
key people	Kirill Krivoschekov, CEO Yury Kovalchuk, Board chairman
industry	Financial services
products	Financial services
foundation	1990
location	Saint Petersburg, Russia
homepage	www.abr.ru
rating	A+ (ACRA) (2017)‡R1R‡

History

Communist Party ownership

JV Neva Chance

Putin's capital support from Leningrad casinos

Capital outflows from the Soviet Union and Russia

During the Putin administration

Sanctions

Sanctions

Assets worth – historical data

Ratings

Management

Subsidiaries

External links

References