Sovcombank

Established in 1990

In 2002, when Sovcombank (Buoykombank at the time) was acquired by Sergey Khotimskiy and a group of co-investors, it had one branch, 17 employees and ₽2 million equity. By the end of 2019, Sovcombank had become the No.3 largest privately-owned bank in Russia by total assets according to Interfax ranking based on RAS, had a branch network of 2 500 offices and employed 15 664 people, whilst the Group reported ₽139 billion total equity demonstrating its ability to grow over time.

The Group has delivered on its own growth strategy by means of successful organic growth initiatives as well as carefully selected and well-executed inorganic growth opportunities. The Group has been able to carefully select underpenetrated market niches with limited competition and by a combination of targeted product offering and wide customer reach deliver strong track record of profitable organic growth. In addition to organic expansion, the Group has grown via smart acquisitions of other financial institutions and businesses operating in select market niches at attractive prices. Since 2014, the Group has in total executed 10 acquisitions and these opportunities have allowed it to diversify its product offering, customer base and deliver further growth.

As a result of the Group’s impressive growth track-record via organic and inorganic means, its asset base has grown 26 times during the period from 2010 to 2019 and has allowed Sovcombank to become No.12 largest bank in Russia by total assets as at 31 December 2020 according to Interfax ranking based on RAS.

The Group growth was partially fueled by its high internal capital generation ability. The Group was the second most profitable banking group in Russia with average ROE over the last ten years (2010-2019) reaching 44%, according to the Group’s calculations based on published IFRS accounts. Not only did the Group deliver a strong through-the cycle profitability track-record, it also reported a stronger performance during the time of economic downturn, with average ROE of the Group during the financial crisis in Russia in 2014-2015 reaching 54%. The Group managed to achieve this by its operations being focused on strict profitability criteria, which are not compromised for additional growth, diversification of its operations and hence profitability profile, as well as prudent risk underwriting policies.

Currently, the Group’s business model is based on three key pillars: retail banking, corporate banking and treasury segments contributing equally to the Group’s bottom line. The Group’s three operating segments are complementary, generate strong synergies and provide important diversification to the Group’s income streams through the economic cycles. The diversification enables the Group to evaluate broader opportunities in complementary markets through the economic cycles in Russia and adjust its business model accordingly to take advantage of such opportunities.

Stages of development

2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2007
2006
2003
2002
1990

Debut Eurobond issue

On 7 October, Sovcombank placed its subordinated Eurobonds for the first time, offering a USD 300M issue with an 8% coupon. The 10.5-year issue came with a call option exercisable after 5.5 years. The "ВВ" rating from Fitch makes it one of the agency’s two best rated subordinated Eurobond issues among Russian banks.

Responsible banking & ESG

Sovcombank becomes the first Russian bank to become a Founding Signatory of the UNEP FI Principles for Responsible Banking, committing to strategically align its business with the Sustainable Development Goals. 46 CEOs, including Dmitry Gusev, the CEO of Sovcombank, launched the Principles at the United Nations General Assembly.

Consortium of investors

From April 2018 to August 2019, the Bank's capital increased by ₽15.6 billion due to investments from a consortium of sovereign funds of Russia, China, Japan, the Middle East countries, as well as the SBI Holdings Inc. (Japan). The co-founders of Rosevrobank (Ilya Brodsky and Andrey Suzdaltsev) became the shareholders of Sovcombank.