International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Russian opposition activist Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
COVID-19 and Trump’s indifference helped human rights abusers in 2020
Jailed Russian opposition activist Navalny drops Putin corruption investigation bomb on his second day home
Russian opposition activist Navalny calls for supporters to take to the streets this weekend
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech Pirates and Mayors approve final coalition agreement for 2021 elections
OUTLOOK 2021 Czechia
OUTLOOK 2021 Hungary
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
OUTLOOK 2021 Slovakia
FDI inflows to CEE down 58% in 1H20 but rebound expected
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
BALKAN BLOG: The controversial recipe for building up Albania
Heavy flooding causes chaos in parts of Southeast Europe
Turnover rose on Bosnia's two stock exchanges in 2020 while prices fell
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
ING THINK: Growth in the Balkans: from zero to hero again?
Spring lockdown caused spike in online transactions in Croatia
Labour demand down 28% y/y in Croatia in 2020
OUTLOOK 2021 Kosovo
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Moldova’s PM resigns to prepare the ground for early elections
Montenegrins say state administration is most corrupt institution
75% of Montenegrins want EU membership
North Macedonia's manufacturing confidence indicator down by 8.5 pp y/y in December
OUTLOOK 2021 North Macedonia
OUTLOOK 2021 Romania
Romania’s central bank cuts monetary policy rate by 25bp to 1.25%
Romanian construction companies' activity slows in November after intense 2020
OUTLOOK 2021 Serbia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
Slovenia’s dire COVID-19 situation in 4Q20 caused second economic dip
ISTANBUL BLOG: Biden must find a way to work with Trump’s strongman pal Erdogan
Turkcell denies any affiliation with $1.6bn loan in default extended by Ziraat Bank to Virgin Islands company
BEYOND THE BOSPORUS: Let’s tentatively pencil in a date for Turkey’s hot money outflow
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Georgia’s political kingpin Bidzina Ivanishvili quits politics
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Tehran Stock Exchange chief quits amid “Black Monday” fury
Durov rejects Western funds’ offer to buy 5%-10% of Telegram with $30bn valuation
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
Jason Corcoran in Moscow -
Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his Russian bank.
Tsvetkov surrendered control of Uralsib, Russia’s 26th largest, on November 4 as part of a bailout after a year of it being on the precipice of bankruptcy and under threat of having its license revoked. Deals to offload the lender to Moscow Credit Bank, Alfa Bank and SMP Bank foundered as the loss-making institution's financial health deteriorated amid the country’s deepening recession, sanctions and a worsening loan book.
As part of the rescue, or “sanitation” as it’s known in Russian, the state will extend an RUB81bn ($1.3bn) lifeline to Uralsib and allow entrepreneur Vladimir Kogan, a close ally of President Vladimir Putin, to take a 82% stake. Tsvetkov will be left with a minority holding. The bailout is the biggest using Central Bank of Russia funds since the controversial takeover of Bank of Moscow by VTB in 2011.
“The writing was on the wall for Uralsib for quite some time,” one former senior employee tells bne IntelliNews. “Even Tsvetkov’s guru, known for his dubious visions and premonitions, would have seen this one coming.”
Tsvetkov is a follower of the self-help guru Sergei Neopoletansky, one of the founders of the doctrine of Sun Light. Neopoletansky, which is believed to be an alias, says he is a disciple of the Indian Hindu guru Sathya Sai Baba. Some of Neopoletansky's adherents believe he is the embodiment of the deity, while other UralSib employees claim he is a charlatan and a crook. Tomes by Neopoletansky called “The Alchemy of Abundance” and “The Matrix of Happiness” became required reading for senior bank personnel who were tested on its contents.
Tsvetkov, a dabbler in ontology, yoga and feng shui, obliged managers to attend seminars at the Ritz Carlton where they were required to talk to trees and pretend to be different animals by growling, grunting and howling on tables. One executive said he was almost fired for declining to attend, while another senior analyst got into strife for dismissing the sessions as “Scientology”.
Former employees at Uralsib tell bne IntelliNews that Neopoletansky was paid “several million dollars” from company coffers for his seminars. Olga Gorshkova, a bank spokeswoman, declined to comment by e-mail..
“His birthdays were legendary,” recalls another former executive. “All senior managers had to line up and each one make equally outrageous comparisons between him [Tsvetkov] and Peter the Great or other heroes of Russian history. It was just like North Korea and nobody dared not do it or they would be out or demoted.”
In 1993, Tsvetkov set up a brokerage called Nikoil, which became Lukoil’s main agent in the notorious voucher auctions. Tsvetkov and his wife Galina pledged their small house in the Russian countryside to set up the firm, according to Thane Gustafon’s book “Wheel of Fortune”.
By the early 2000s, Tsvetkov and Vagit Alekperov, founder of Lukoil, had contributed substantially to one another’s fortunes. Nikoil, which would become Uralsib, organized Lukoil’s privatisation and served as its investment bank, managing relationships with potential foreign lenders and investors. By 2002, Tsvetkov was listed as Lukoil’s second-biggest shareholder, while Alekperov was listed as a major shareholder in Nikoil.
A fitness fanatic who served in the Soviet air force, Tsvetkov commanded that elevators at the bank’s Moscow headquarters be blocked from stopping on floors 1-4 on the way down to encourage exercise. He obsessed about diets and encouraged vegetarianism, fasting and starvation.
Another hobby of his was numerology. In 2007, Tsvetkov was assessing two candidates as a replacement for chairman of the bank. The two contenders were Andrei Donsky and Vladimir Ryskin, and Tsvetkov eventually opted for Donsky because his tenure at the bank was numerologically compatible with his, according to one insider at the bank.
A devotee of feng shui, a Chinese system of keeping things in harmony, Tsvetkov paid an extortionate rent for the bank’s London office in Tower 42 because “the building looks like a rocket ship to the stars”, according to a former staffer. The office, which takes up the south-facing side on the 33rd floor, was decorated with space motifs and has an amazing view of the Thames from Tower Bridge to the Big Ben. “It is the ideal feng shui location,” says the former exec.
To his credit, former staffers say Tsvetkov refused to deal with state companies or energy companies because he thought “dirty money” would contaminate the group and his wellbeing. Hence, the bank's balance sheet remained small and it became overly exposed to the risky real estate and constructions sectors.
Tsvetkov used to circulate company presentations with new age-inspired titles like “The Corporation as an Organism” with pictures of zodiac signs, according to a former Uralsib trader. “However, if you leafed through these presentations, sometimes they also had real information in them like financial performance figures for different departments of the bank. These couldn’t be located then in the actual IFRS filings,” says the former trader.
Tsvetkov has been very involved in charity and Forbes reported he spent as much as $300mn of company funds on the restoration of churches, the construction of houses for families with adopted children and other projects.
By 2006, Uralsib was the fifth biggest lender in the country by assets and among the bracket of the five most profitable. But the bank never really recovered from the 2008 financial crisis, and Tsvetkov was forced to sell off his supermarket chain Kopeika in 2010 to help plug a financial hole and keep Uralsib solvent.
Tsvetkov had been desperate to sell the supermarket business to the US giant Walmart, but was frustrated when the Kremlin intervened and told him to sell it to X5, the retail chain of Mikhail Fridman’s Alfa Group. “He nearly had a meltdown because he had to accept Alfa’s oil money rather than the Walmart deal,” says one executive from that time. “He disappeared to the retreat in New Mexico for 10 days to get his head around it.”
At the same time, former executives claim Tsvetkov knew many of the bank’s managers were “diverting profitable trade” to other lenders for kickbacks and did nothing about it.
Forbes estimates the capitalization of the bank tumbled from a peak of $7.9bn in 2007 to a paltry $170mn today. And in mid-October, Fitch Ratings lowered Uralsib's long-term foreign-currency issuer default rating to 'B-' because of the weakening of the bank's capitalisation, asset quality and profitability. Problem loans surged to 15% of the loan book and the bank faced the risk of breaching the 6% Tier 1 capital ratio, according to Fitch.
Mikhail Sukhov, deputy governor of the central bank, claimed the real value of Uralsib’s assets were overstated by “tens of billions of rubles”. The regulator didn’t find any evidence of outright fraud, but said the lender’s business was unprofitable due to high internal costs.
Forbes estimates that Tsvetkov’s own wealth has shrunk to just $350mn from $5.2bn in 2006. Tsvetkov, who hasn’t talked to the media in years, is apparently unfussed by the decline in his fortunes and is happy to focus on his spirituality and research activities.
Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more
bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more
bne IntelliNews -
Russia has classified details of its assets held abroad to prevent their seizure ... more
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at firstname.lastname@example.org
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: