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. Last Updated: 07/27/2016

Unexim Loses Bank To City Competitor




Increasingly powerful Moscow financial group AFK Sistema wrested control of the insolvent Unikombank from the Unexim group after the Moscow City Duma handed over a controlling interest in Unikom to a Sistema subsidiary.


The regional legislature voted to give a 51 percent stake in Unikombank to Guta Bank as collateral for a 100 million ruble ($5 million) loan to be used to restore the bank's liquidity - a vital concern for the Moscow region because Unikombank is the key financial institution in the area.


Sistema, a complex and growing conglomerate that has strong ties to the Moscow Mayor's Office, owns Guta, a ghefty property portfolio and is built around holdings in the Moscow Telephone Co., or MGTS.


The loan, half of which has already been disbursed, will help pay wages to state employees, social allowances and liabilities to Unikombank's depositors, a Guta spokesman said.


In return, Guta is entitled to hold the 51 percent stake in Unikombank for five years, but it intends to buy them out within a year on terms "favorable" for the regional government, the spokesman said.


Despite Unikombank's lack of performing assets and low liquidity, Guta's effective acquisition of the troubled bank makes sense, analysts said. Guta will be able to reap rewards from charging commission on the lucrative businesses of brokering deals between Unikom's numerous creditors and debtors, said Alexei Vasilyev, an analyst with Skate Press agency. It will also get access to Unikom's considerable real estate holdings.


To gain rights to the stake, Guta won a closed tender in which Menatep, Vozrozhdeniye, Uneximbank and Moscow City Bank also competed.


Sistema's main banking arm made its move into the Moscow region because "competition on the Moscow market is extremely stiff, while the region is more favorable for business."


The bank plans to invest in export projects for military-industrial enterprises, as well as in agricultural and scientific projects in the region, he added.


The Central Bank last summer appointed Unexim - at the time one of Russia's biggest banks - crisis manager at Unikombank and Unexim's rehabilitation program was approved by Unikombank's board of directors as recently as late November.


Unexim had planned to strengthen its position in the Moscow region through mergers with Unikombank, which has over 50 branches, most of them in the region, and with Vozrozhdeniye.


However, Guta's up front offer of a large loan appealed more to regional Duma deputies than Unexim's plan, which provided for smaller cash injections spread out over a period of time and targeted at particular restructuring projects.


The backing of Moscow regional Governor Anatoly Tyazhlov was also a major factor in the regional chamber's decision.


The takeover was logical and will be beneficial for all the parties involved apart from minority shareholders and some depositors, he said.


"Unexim does not exist as a bank anymore, the whole group has been weakened considerably, while Guta is one of the strongest banks in the country," Vasilyev said.


Unexim is still determined to recover the 130 million rubles in stabilization loans it granted Unikombank in the fall, a spokesman for the bank said.


The acquisition of Unikombank comes after Guta's earlier plans to merge with the Moscow Bank for Reconstruction and Development, a member of its holding, were put on hold because of the crisis, the bank's spokesman said.