Otkritie FC Bank Struggles Amid Liquidity Issues and Sanctions

In 2017, Otkritie FC Bank faced a major crisis due to its involvement in the Russian banking sector's troubles. The bank's shares plummeted in value.

The bank's difficulties were largely caused by its exposure to the Russian government's sovereign debt, which was downgraded by credit rating agencies. This made it harder for the bank to raise capital.

Otkritie FC Bank's liquidity issues were further exacerbated by a series of bank runs and withdrawals by depositors. The bank's assets were also frozen by the Central Bank of Russia as part of a broader crackdown on the banking sector.

In July 2017, Otkritie experienced a significant outflow of liquidity after being assigned a BBB− rating by ACRA.

The bank's senior managers removed their personal funds, contributing to the liquidity crisis. By late August, Otkritie shares had fallen to a 20-month low.

On 29 August 2017, the Central Bank of Russia took over the administration of Otkritie, likely a response to the bank's financial struggles.

In July 2017, Otkritie experienced a significant outflow of liquidity after it was assigned a BBB- rating by ACRA.

Senior managers of Otkritie removed their personal funds from the bank, contributing to the liquidity crisis.

By late August 2017, Otkritie shares had fallen to a 20-month low.

The Central Bank of Russia took over the administration of Otkritie on August 29, 2017, in response to the bank's liquidity issues.

In August 2021, the Central Bank of Russia announced preparations for the sale of Otkritie FC Bank, including a timeline for accepting applications from potential shareholders.

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Sanctions have been imposed on Otkritie FC Bank by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) under E.O. 14024.

These sanctions were put in place on 24 February 2022, citing the bank's ownership and control ties to the Government of Russia (GoR) and its operation in the Russian Federation's financial services sector.

Subsidiary companies of Otkritie FC Bank were also sanctioned by the U.S. under this order.

The UK first imposed an asset freeze sanction on Otkritie FC Bank on 28 March 2022.

The UK's sanctions were later increased in March 2023 to include trust services.

In December 2023, the UK increased its sanctions again to include a prohibition on correspondent banking relationships.

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Boris Mints, co-founder of Otkritie bank, is at the center of a lawsuit in the UK. He allegedly had a relationship with the bank despite selling his shares in 2013.

The central bank claims Mints' company, O1, sold bonds to the bank as a "fraudulent scheme" to pay off debt just days before the collapse. This is according to a Financial Times report.

Mints and his sons deny committing fraud and are contesting the allegations in arbitration proceedings scheduled to be heard in London next April.

Russia petitioned the UK court to freeze £470 million of Mints' assets, including a mansion in Scotland, in June 2018. The court agreed to an injunction prohibiting Mints and his sons from disposing of assets.

The Tower of Lethendy, a mansion in Perthshire, Scotland, is one of 140 of Mints' properties the banks are trying to confiscate. It's owned by MFT Braveheart Ltd, a company registered in the Cayman Islands.

Otkritie FC Bank has a strong presence in the Russian banking market, with a network of over 1,000 branches and a wide range of financial services.

The bank has partnered with several prominent institutions to expand its reach and offerings, including the Russian government and major corporations.

Otkritie FC Bank's partnerships have enabled it to offer a range of financial products and services, including loans, deposits, and investment solutions.

The bank's partnership with the Russian government has allowed it to participate in state programs and initiatives, such as the development of the country's infrastructure.

Otkritie FC Bank's network of branches spans across 82 regions of Russia, providing customers with convenient access to its services.

The bank's partnerships have also enabled it to offer a range of specialized financial services, including corporate banking and private banking.

Otkritie FC Bank has a history of securing funding through multiple rounds, with its first funding round taking place in 2015.

The bank has managed to attract a number of institutional investors, with a total of 9 investors on board, including notable names like Credit Suisse and Societe Generale.