VTB, FC Otkritie, BM-Bank increased balances on interbank lending accounts by more than 1.8 trillion rubles

As a result of transactions carried out in October, funds raised and placed on the interbank loan market in VTB Group banks increased by more than 1.5 trillion rubles, it follows from their reporting. The redistribution of funds was necessary to maintain liquidity ratios against the backdrop of consolidation. The risk of violation of the standard for FC Otkritie could arise due to the transfer of a large volume of securities to the balance sheet of VTB.

Three large banks belonging to the same group – VTB, FC Otkritie and BM-Bank – increased their account balances on attracted and placed interbank loans totaling more than 1.8 trillion rubles. This follows from the reporting of credit institutions on Form 101 as of November 1.

In particular, the growth of funds provided under interbank loans (IBC) at FC Otkritie exceeded 804 billion rubles, at VTB – almost 555 billion rubles, at BM Bank – more than 504 billion rubles. At the same time, funds raised in the interbank lending market by VTB increased by 764 billion rubles, by FC Otkritie by 578 billion rubles, and by BM Bank by 500 billion rubles. Almost 200 other banks, according to published reports, did not experience comparable changes during the reporting period.

As a result of such transactions, a bank that received financing from another credit institution repays the debt not to the one who issued the loan, but to a third bank, Kommersant’s interlocutors in the financial market explain. Banking expert Alexey Nechaev believes that transactions “worth approximately 500 billion rubles” could have been carried out between the group’s banks. The remaining amounts could be raised or placed with other banks, Kommersant’s sources note.

According to two interlocutors of Kommersant on the market, “the nature of these transactions is related to the process of joining FC Otkritie to VTB.” The bank confirmed to Kommersant that the increase in interbank lending activity at the beginning of the fourth quarter was due to “the intensification of the process of migration to the balance sheet of VTB Bank of assets and liabilities from the balance sheet of FC Otkritie Bank.” In early December, Deputy Chairman of the Board of VTB Georgy Gorshkov said that the integration of FC Otkritie Bank would be completed by the end of 2024.

In fact, the merger process goes through the transfer of the assets of the merging bank to the balance sheet of the parent bank, as a result of which an “empty” bank is formed and a license is handed over, explains one of Kommersant’s interlocutors. VTB is buying out the assets of FC Otkritie, which is why transactions could be carried out on the interbank market.

The participation of a third player (BM Bank, which is undergoing reorganization) may mean that some bad assets of FC Otkritie could also be intended for transfer to its balance sheet, admits one of Kommersant’s interlocutors. First Deputy Chairman of the Board of VTB Dmitry Pyanov explained in early December that the bank carried out assignment transactions with FC Otkritie in October, as a result of which the latter received a loss (see Kommersant on November 28).

According to Denis Taradov, partner of the Unicon audit and consulting group, operations in the interbank market are common to regulate liquidity. Usually in this case, money is raised for a long term and placed for a short term. Thus, a large short-term liquid asset appears on the bank’s balance sheet, while the liability remains long in maturity, the expert explains.

In particular, from the reports of the bank FC Otkritie it is clear that its instant liquidity ratio N2 for October decreased from 55% to 24% (regulatory minimum – 15%). “It is possible that within a month the bank had a risk of violating the N2 standard, which it eliminated by attracting interbank credit from a group member (BM-Bank) and placing the funds received for up to one day in VTB,” believes Mr. Nechaev. As VTB explained to Kommersant, the liquidity needs of individual group members are met, among other things, “within the framework of standard procedures for intra-group redistribution of attracted market resources.”

A decrease in the bank’s instant liquidity ratio (N2) may be caused by a reduction in the trading portfolio of securities, explains Denis Taradov. Mr. Nechaev admits that the key factor was the sale by the bank within the group of OFZs, which were reflected at fair value. According to the reporting, in general, the securities portfolio of Otkritie Financial Corporation, reflected at fair value, decreased over the month by 239 billion rubles, and the portfolio valued at amortized cost (should not affect the liquidity standard) decreased over the same period by almost by 125 billion rubles.

Olga Sherunkova