Subsidiary bank of Sistema PJSFC: East-West United Bank in Luxembourg

In 1974, East-West United Bank was founded in Luxembourg as the chief representative of the economic interests of the USSR in Western Europe at that time. Today, from a closed institution, EWUB has turned into a very successful bank, offering convenient solutions for both corporate and private clients worldwide, whose business is connected with Russia in one way or another.

Almost a family business

During its long history, the bank changed its owners several times. Its first shareholders were Vneshtorgbank and the State Bank of the USSR; later, Imperial Bank tried to acquire the block of shares, but the deal was declared void. From 2000 to 2007, EWUB belonged to Vneshtorgbank (VTB), which had to put the bank up for sale for various reasons.

In 2001 the block of shares was acquired by Sistema PJSFC, and after 6 years, the company became the majority shareholder of the bank. At this time, Sistema controls 34% of the capital directly and 66% through the Moscow Bank for Reconstruction and Development (now PJSC MTS Bank). By 2018, Sistema will have control over 100% of the bank’s capital. The uniqueness of East-West United Bank is being a bank licensed under European laws and operating under the supervision of European authorities, with that it’s the property of a Russian company.

The bank can be called almost a family business as the founder, and the main shareholder of Sistema PJSFC remains Vladimir Evtushenkov. His wife Natalia is a member of the MBRD board and a member of the MTS Bank board.

Vladimir Evtushenkov began his career in 1975 as a shop manager at one of the factories. Still, by 1990 he became the chairman of the Moscow City Committee for Science and Technology, and in 1993 he created Sistema PJSFC, one of the largest public companies in the world today. In addition, Vladimir is a member of the Council on Competitiveness and Entrepreneurship of the Russian Federation Government, a member of the Board of the Chamber of Commerce and Industry of the Russian Federation, co-chairman of the Joint Committee of the Russian Union of Industrialists and Entrepreneurs on Industrial Policy and Technical Regulation (since February 2021). The Duchy of Luxembourg recognized the enormous contribution of Vladimir Yevtushenkov to the development and strengthening of relations between Luxembourg and Russia. It appointed him its honorary consul in Khabarovsk and awarded the title of Commodore of the Order of the Oak Crown, the third by seniority in the Luxembourg state awards hierarchy.

Natalia Evtushenkova has been professionally engaged in banking since 1999. During this time, she has made significant advances. Having come to JSCB MBRD OJSC as the head of the internal control department in 2000, she was elected a member of its management board, and since 2004 she has been a member of the Board of Directors. After the bank was renamed into MTS-Bank, Natalia continues to work in the Audit Committee and secures her place on the Board of Directors. Since 2008 Natalia Evtushenkova has been a member of the Board of Directors of East-West United Bank. Natalia has repeatedly occupied the first places in the ratings of Russian women bankers, and in 2010 she was awarded a special “Bank Crown” prize of the banking community.

But why is it “almost” a family business? The answer is simple – the bank has other shareholders and corporate governance. Free float (shares) account for approximately 16.5%, free float Global Depositary Receipts (GDRs) is 15.9%. In addition, 8.4% of ordinary shares and GDRs belong to members of the Board of Directors, the management of Sistema PJSFC.

In 2015, the bank’s Board of Directors was chaired by the former Minister of Economy and Foreign Trade of Luxembourg Jeannot Krecke. Mr. Krecke held this post from 2004 to 2012, actively developing partnerships with Russia. At the same time, Jeannot Krecke was the representative of Luxembourg in the European Union for Economic and Financial Affairs Council. Since 2012, Mr. Krecke has been involved only in private business projects, and he is on the Board of Directors of several large companies, including China Construction Bank Europe, Calzedonia Finanziara S.A. In addition to his active, practical activities, Jeannot Krecke is also engaged in scientific work, and he is the author of works on the control functions of the Luxembourg Parliament and taxation of individuals.

East-West United Bank’s Board of Directors consists of three independent directors: Mr. Didier Mouget, Mr. Robert Schaus, and Mr. Hans-Ulrich Hugli.

Didier Mouget chaired PwC Luxembourg from 2007 to 2015 and served on several Luxembourg advisory committees.

Robert Schaus is the CEO of Presta Group (Kleinbettingen, Luxembourg), a set of companies operating in the energy sector, an expert in strategy and organization.

Hans-Ulrich Hugli is a member of the board of directors of Vodafone Investments Luxembourg and Tareno Luxembourg.

In addition, the members of the Board of Directors are professional Russian economists and bankers V. Rozanov, S. Pchelintsev (managing director), I. Filatov, V. Travkov.

Carrying on traditions and making effective decisions: the unique experience of EWUB shareholders

Continuing and preserving traditions is an essential component of the East-West United Bank shareholders’ activities. Thanks to the bank, the pearl of Luxembourg architecture Villa Foch, built in 1875, was preserved. In the early 1970s, the villa was under threat as its owner, the metallurgic concern ARBED, decided to sell its property to retrieve the company from ruin, and the construction of two residential buildings was planned on the site of the villa. East-West United Bank bought the mansion and the surrounding area, while the exterior of the building, its interiors, and park were preserved entirely.

New traditions are also created in the company, for example, dynastic rule. The son of Vladimir and Natalia Yevtushenkov, Felix, continued the family business. Since 2015, he has been a member of the Board of Directors of Sistema PJSFC, and since 2020 he is the head of the Board of Trustees of the Sistema Charitable Foundation. In 2018, Vladimir Yevtushenkov transferred to Felix Vladimirovich a block of shares in the amount of 2.5% of the registered capital, his son’s share was 5.1817%.

Since 2017, EWUB shareholders have been developing and, in 2018, finally adopting a new business strategy, the main principles are the development of transactional banking and personal banking services. The bank sets out to many very ambitious, but at the same time solvable tasks:

  • increasing the number of the bank’s clients by the building of brand awareness, expansion in the number of partner companies, building internal resources;
  • expanding the bank portfolio;
  • creation of positive experience for clients by investments in banking infrastructure and digital channels.

In the same 2017, as part of a new strategy, the bank launched a Direct Bank, an online platform “East-West Direct” with round-the-clock access. Direct Bank offers individuals saving accounts and deposits with instant access and varying maturity – from 3 to 48 months. Over the three years of operation, the service has attracted about 4,000 new clients from Germany and Luxembourg to EWUB, with a total of about 130 million euros deposited. The company plans to enter the markets of other EU countries and use the platform as a channel for the sale of investment and credit bank products.

Another service, Trade Finance, was launched in 2019 as part of the new strategy. It is designed for account management using trade finance transactions. The primary users of the service are traders, importers, and exporters.

In 2021, the bank’s development strategy remains unchanged – increasing the efficiency of business processes, developing and introducing new banking products.

Today East-West United Bank serves 500 clients, including individuals with solid assets, companies conducting international trade or business, holding and investment companies, stockbrokers. The successful work of a bank in the European Union market is mainly due to the personalities of its shareholders. Thanks to the active and professional participation of the Yevtushenkov family in solving global issues, their experience, and reliability, the bank manages to build the right strategy for the company’s development and minimize risks.

The post Subsidiary bank of Sistema PJSFC: East-West United Bank in Luxembourg appeared first on Evertise.

Usman Sabir