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. Last Updated: 07/27/2016

High-Roller Bankers Seek New Thrills

A velvet revolution is under way in the boardrooms of some of Russia's largest banks, a quiet and apparently civilized changing of the guard.


The colorful characters -- the actors, scientists and politicians -- who have led the banks to wealth and prominence are stepping aside, making way for more professional, more anonymous, bankers.


Why this is happening is still a matter for informed speculation. Some say it's because the world of banking has become too sophisticated for the old guard. Others say the bosses simply have spied more interesting and lucrative pastures.


What is not in doubt, however, is that some of the new Russia's household names are -- at least formally -- moving from positions that have brought them enormous power.


Vladimir Gusinsky, the president of MOST-Bank, made his resignation from the bank official last week, moving to head the media group he has formed that includes NTV television, the Sevodnya newspaper, Itogi magazine, Ekho Moskvy radio and other interests.


Gusinsky's move followed similar decisions by a string of other influential financiers.


Menatep's founder Mikhail Khodorkovsky, Uneximbank boss Vladimir Potanin and Boris Berezovsky of LogoVAZ and Obyedinyonny Bank all have voluntarily resigned their posts as bank executives within the past 10 months.


Each has been replaced by bankers who have less of a public profile and more a focus on banking basics. Usually, each was No. 2 at his respective bank.


The movement of these tycoons points to a profound shift in the structure and composition of top management in Russia's leading banks, industry analysts said.


"It is characteristic that there is an increasing number of [financial] professionals in the managements of banks," said Andrei Yashchenko of the United City Bank investment bank. "Competition is getting harder and banks need more subtle and professional leadership."


Gone are the rough and tumble days of hyper-inflation, when Russia's commercial banks could make a killing on the currency market or through transactions in the Moscow real estate market.


"Russian banking is becoming more developed and the financial instruments more complicated," Yashchenko said.


In addition, major Russian banks are today involved in a dizzying range of businesses -- from issuing credit cards to producing oil or fertilizers -- and there is pressure to specialize management of the empires.


"The activities of the top banks with their large equity portfolios have become so diversified that no one person can make all decisions himself," said one Russian banker, who asked not to be identified.


But psychological factors may also have played a role behind the bankers' decisions to move into politics (Potanin and Berezovsky ), the media (Gusinsky), or industrial management (Khodorkovsky).


"After having had success in banking [their] ambitions have increased ... or changed direction, that is quite human, I think," said Igor Trosnikov, the financial editor of Kommersant Daily.Khodorkovsky's move to head the Yukos oil giant that Menatep now controls, for example, can hardly be considered a demotion. Yukos' oil production is approximately the same as that of Texaco. Even today, Yukos' revenues ($5 billion in 1995) dwarf Menatep's assets (roughly $1.7 billion).


Gusinsky, too, is moving to potentially rich pastures. The MOST-Media group includes one of Russia's three national television networks, as well as the nascent satellite television concern, NTV Plus. These are only likely to grow, while NTV already showed the political influence it can command during last summer's presidential elections.


Potanin has become First Deputy Prime Minister for the economy, a post with great potential for any bank chief. As for Berezovsky, the benefits of his move from business to a seat on the Security Council are murky, but he has spent a good deal of his time in the job so far talking oil deals in the North Caucasus.


In fact, the title of bank president was never much of a straitjacket for the wide-ranging ambitions of these figures. It may just be that now their titles have caught up with them.


Gusinsky and Berezovsky not only presided over some of Russia's largest capital concentrations. They became well-known public figures in their own right, playing key roles behind the scenes of Russian political life.


The new heads of Uneximbank and Menatep, Mikhail Prokhodov and Sergei Monakhov are also ranked among Russia's most influential businessmen, but their style is far less flamboyant.


In a rare interview last year, Monakhov emerged as a proponent of a collective management style with emphasis on a strong centralized administration.


"Banks without bureaucracy do not exist. Everything has to be regulated," he said and added that a main asset of Menatep is in its "teamwork."


The top management changes at Uneximbank, Menatep and MOST-Bank all seem to have had a largely evolutionary character -- with the former deputies now in the driver's seat.


The new top managers at these banks are "competent, but of a different temper" than the people they replace, said the Russian banker, who asked not to be identified. "They have all played secondary roles for years."


The biography of the new MOST-Bank president Boris Khait, who has collaborated with Gusinsky for almost 10 years, bears this out. Gusinsky and Khait were both among the founders of a small business consulting firm, Infex, set up in 1988 and then went on to found the Most Group together.


For more than five years, Khait was running much of the day-to-day business of MOST-Bank as its board chairman, with Gusinsky at the helm as president.


"It is a long time since Gusinsky was really in charge of the banking business," said Trosnikov. "For all intents and purposes he is not a banker anymore."


Actually, before going into business Gusinsky was a theater director. Khodorvsky was an engineer. Berezovsky was a corresponding member of the Russian Academy of Sciences.


In the end, however, this boardroom revolution may have been so smooth because the short-term impact of the changes is minimal, with Gusinsky, Potanin and the rest of the old guard retaining considerable leverage behind the scenes.


"They still have enormous influence" over the banks, Trosnikov said. "In Russia you don't necessarily need a formal title to have a large impact."