Deals
Russia Private-Bank Experiment Implodes With Otkritie Rescue
- Once a Rosneft savior, central bank favorite is nationalized
- Lender is first ‘systemically important’ bank to be bailed out
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The bailout of one of Russia’s biggest banks may spell the end of a short-lived effort by ambitious private lenders to both compete with the state giants that dominate the industry and help them navigate sanctions.
The central bank’s takeover of Bank Otkritie FC this week signals the failure of a strategy conceived three years ago, when tumbling oil prices and international penalties created an opportunity for a new generation of banks not directly tied to the Kremlin. With companies including Sberbank PSJC, which holds about half of Russia’s savings, constrained by financial curbs, a clutch of private lenders favored with cheap state funding emerged to fill the gap.