"Modest improvement and better ownership disclosure create new leaders", a report by Standard & Poor’s runs.
Photo: Nikolay Cyiganov
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Russian Banks Still Desperately Lack Transparency
Standard & Poor’s has presented a report on informational transparency of Russian banks, noting that the Russians strive to become more open. Yet, even the best Russian lenders have failed to become as transparent as Western banks. The Russians still give no information on deals with interests and remuneration for directors and auditors.
The Standard & Poor’s rating agency is to reveal on Friday its report, “Transparency and Disclosure by Russian Banks in 2006”, evaluating their transparency in the opinion of international investors. The report featured the banks that have already formed credit history on international markets. Russian banks have made the most significant in disclosing information on risk governance policies and ownership structure, Yulia Kochetygova, director of corporate governance ratings at Standard & Poor’s, said. However, data on deals with interests or remuneration for directors and auditors are still secret, though it is very important for institutional investors and clients.
None of Russian banks managed to score the maximum possible points in the S & P list. “The average index of disclosure at the banks included in the research is 48 percent of the total volume of information,” Yulia Kochetygova said. Meanwhile, a similar report on foreign banks puts the average of informational transparency at 79 percent.
Analysts at Standard and Poor’s made an evaluation of the banks’ transparency according to their ownership and corporate structure, disclosure of financial and transactions information as well as their line-up and work of the board of directors and management. Only public information was evaluated. Dmitry Dudkin at Uralsib says: “It is quite logical because it is the need in overseas borrowings and attracting additional capital to the bank that makes it disclose information about itself in a greater detail.”
Market players admit that transparency go a lot of good to banks. They think, however, that a greater transparency will not longer be effective in bringing down the cost of borrowings. “There won’t be any great financial effect from a more detailed disclosure of information,” Dmitry Dudkin says. Oleg Gordienko, head of Raiffeisenbank’s bounded debt department, specifies: “Still, investors put limits on the borrower according to other parameters as well. They examine the quality of management, profitability of the business and other economic indicators. It does not matter that Binbank has made a huge leap in this rating. It still borrows paying more than Alfa Bank.”
Experts believe that the factors that Standard & Poor’s pointed out play a less important role on the domestic market. Roman Zhurkov, director of Transkreditbank’s investment and banking services department, explains: “People in Russia still tend to pay more attention to the line-up of shareholders rather than to the efficiency of the company.
Yulia Chaikina
All the Article in Russian as of Oct. 13, 2006
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