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. Last Updated: 07/27/2016

CEO Steps Down from MDM Bank

VedomostiAndrei Savelyev
The Western-trained chief executive of one of Russia's biggest private banks, MDM Bank, said on Friday that he was resigning over strategic differences with its owners but would remain until a successor was found.

Andrei Savelyev said there had been irreconcilable differences between himself and the board over the bank's future direction. "As we were not able to bridge the differences this week, we both reached the agreement that I will leave my current position at some point in the future," he said.

He added he had been talking to financial and industrial companies in Russia and other former Soviet countries and he appeared to have a new job lined up. "I expect to announce my new position shortly," he said.

He said he would leave on friendly terms: "No firm date has been set, and I will only leave when such a time comes that a successor is elected by the supervisory board, according to board procedure, and the successor takes over."

News of Savelyev's departure broke just days after MDM placed a two-year $250 million eurobond, on par with a coupon of 7.5 percent.

MDM Bank's chairman, Andrei Vernikov, said Savelyev had favored the idea of splitting up the bank's retail and investment banking activities while the board firmly believed the universal banking concept was sound.

"We think the model of the universal bank has not outlived its usefulness, and we think it suits the needs of our customer base," Vernikov said. "We believe we can strengthen our brand and our business."

"This was the core of our conceptual disagreement. Andrei wants to stick to his vision of what a Russian financial institution should be," he added.

Vernikov said MDM Bank was one of the top three privately owned banks in Russia, measured by assets and capital. Its core shareholders are Andrei Melnichenko and Sergei Popov, both board members, the bank disclosed in its eurobond prospectus.

Russian banks have enjoyed explosive growth of deposits and loans over the past year since a short-lived banking crisis in the summer of 2004 subsided.

The transparency of MDM Bank's accounting is also highly ranked in Russia, according to a recent survey.