INTERVIEW: Otkritie FC Bank seeks closer ties with Chinese funds

VIENNA, Jan 27 (PRIME) -- Otkritie Financial Corporation (FC) Bank sees growth potential for its business with Chinese banks and is in negotiations to attract funding in China, Managing Director for the International Business Yury Lekarev told PRIME in an interview published on Friday.

“We have long been cooperating with Asian, and in particular, Chinese partners. These are quite large banks,” Lekarev said.

“We have been historically servicing trade flows and have lately been attracting money from them not only in the framework of trade financing, but as bilateral and syndicated loans as well. We noticed potential for growth and for expanding joint business over the last few years, and cooperation is expanding gradually.”

He said that Chinese banks’ advantages are a risk valuation methodology that differs from the one in Western banks and their willingness to lend large sums.

“One of the advantages of our Asian partners is in their different approach to risk assessment. There no other banking regulation restrictions and the legal environment is often more favorable, including to their Russian counteragents, than with their Western colleagues,” he said.

“We see the highest potential in cooperation with China, this is our strategic direction. We are widening the number of counteragents, develop the relations, including with regional banks.”

Cooperation with Chinese regional banks requires frequent meetings to tell them that Otkritie, while being one of Russia’s largest banks, is not on the Western sanctions list – a combination that is important for Asian partners.

The bank wants to raise Chinese funding.

“Any market participant is interested in diversifying his funding sources while maintaining its target cost. European banks prefer to enter interbank deals with relatively small sums, while the Chinese are ready to consider quite large sums. This is why we are in talks with them, looking for and finding compromises,” Lekarev said.

However, the bank has no massive fundraising plans for 2017, although deals cannot be excluded.

“There is no shortage in money sources. Moreover, we see one of the lowest level of rates for hard currency funds in history,” he said.

Lekarev said that cooperation with China does not mean that Otkritie has abandoned its other directions – the bank plans trade financing and financial market deals with European banks.

Otkritie plans no buy backs of its Eurobonds this year, preferring to redeem them on a large scale in 2019.

“We see no sense in buying our debt early, especially since this is mainly subordinated Eurobonds, which partially make second tier capital. As for senior debt, the Eurobonds are traded at par now, which suits us perfectly,” Lekarev said.

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