Russia’s bailed out bank, backed by Kremlin insiders, grew too fast

Reuters chronicles the rise and fall of Russia’s Otkritie bank, which the Russian central bank bailed out this week. Otkritie, which was Russia’s seventh largest lender and largest private bank, garnered support from within Putin’s inner circle while it acquired rival banks, pension funds and Lukoil’s diamond business and threw lavish parties at the St. Petersburg economic forum. Otkritie’s attempt to  buy the Rosgosstrakh insurance company and become Russia’s top insurer led to liquidity problems and the central bank intervening. Along the way, Otkritie enjoyed the support of state-owned VTB, Russia’s second largest bank, which at different times held 2o and 9.9% stakes in the private lender. Several Russian bankers even referred to Otkritie as a private extension of VTB.

 

Read original source.