MOSCOW, September 21. /Offset. TASS Maria Rumyantseva/. The Bank of Russia will provide financial support to banks group Bank, on reorganization which through the Foundation of the consolidation of the banking sector regulator announced Thursday.
Thus, the Bank became the second after “FC Opening” a credit institution, whose owners turned to the Bank for help.
The banking group, in addition to the Bank include the Growth of the Bank, which also agreed to sanitize, b & n digital and Uralprivatbank.
Wednesday, September 20, it became known that one of the owners of the Bank – Mikail Shishkhanov, who owns 59.4% of the shares of the organization appealed to the Bank with the request to consider the possibility of rehabilitation through Fund consolidation. The businessman admitted that “miscalculated the business-power – problems the growth of the Bank, taken to reorganize, and MDM Bank were much more serious than expected”.
“Our goal with the support of the Central Bank of the Russian Federation through the Foundation of the consolidation of the banking sector to conduct an effective financial recovery of the Bank and the growth of the Bank. This is the best option, which fully guarantees the interests of all customers of the Bank, including each of the investor,” he passed through the press service.
On the same day, the regulator has provided Bank support – a loan to maintain liquidity, to enable the Bank to meet its obligations to customers, including those who decided to prematurely withdraw their deposits. Along with this, the Central Bank decided not to impose a Bank moratorium on satisfaction of creditors ‘ claims, which saved customers the opportunity to continue to withdraw their deposits fully or partially. Thursday in the Bank and Increase the Bank appointed a temporary administration, composed of employees of the Bank and Fund consolidation.
However, bailing out banks whose owners have not calculated their strength, are unlikely to regulator the norm.
Problems of the Bank were known to the Central Bank a year ago
As reported on Thursday, Deputy Chairman of the Bank of Russia Vasily Pozdyshev, the need for financial recovery, the Central Bank discussed with the owners of the Bank in the autumn of 2016.
After the legislative introduction of a mechanism of rehabilitation through Fund consolidation talks began about solving the problems of the Bank. The owners of the Bank, the Central Bank offered different plans, based on provision by the controller of preferential credit for up to 10 years. However, the Central Bank agreed to help the Bank thus because of the size of the loan requested.
“Until September, the owners proposed plans of financial improvement, quite a few. They admitted that banks need recapitalization. But all these plans of financial recovery was based on one and the same sentence – let them, the owners, a soft loan for up to 10 years,” said Pozdyshev.
Before the decision on reorganization, the regulator ordered the Bank to dosdat reserves, resulting in the capital of credit organizations has fallen by more than 30%, which on the background of the outflow in September, 56 billion roubles of funds of individuals and legal entities was the basis for appointment in the Bank temporary administration. In order to enable the Bank to meet its obligations to depositors, the Central Bank had to give him credit.
Overall, however, the lack of liquidity for the Bank is not as significant compared to “FC Opening”, besides he has a lot of sources for liquidity, said Pozdyshev. He also promised that the Central Bank will for credit institutions lender of last resort (lender of last resort – approx. TASS.). “If during the day they collect funds can not, then it will support”, – said the Chairman of the Central Bank.
To assess for the three months
Financial rehabilitation of the Bank of the Fund consolidation will take 6 to 8 months and will be held in two stages, said Pozdyshev.
The first phase will take from one to three months within which to run the interim administration, it will evaluate the financial condition of the Bank and “if necessary, to create additional reserves for possible losses and will carry out the revaluation of property”.
The Central Bank has already pre-evaluated the need for additional formation of reserves of the banking group of the Bank 250-350 billion.
The results of the work will also be assessed the value of own funds (capital) of the Bank and the need for their increase at the expense of Fund consolidation, but now shareholders of the Bank assist in the design of assets, mainly industrial, to the credit institution’s balance sheet, said Pozdyshev.
Central Bank insists that all the free assets that are not encumbered and not incorporated, shall return to the Bank. “The list of these assets will be determined by the interim administration,” – said the Chairman of the Central Bank.
The fate of employees and management
As for personnel decisions concerning personnel, “including collegial management bodies of a credit organization”, said Pozdyshev, they will accept the interim administration, the evaluation of the condition of the Bank. On the eve of the announcement of the reorganization, the Board of Directors of the Bank decided to elect the Chairman of the Board of Directors shishkhanova.
“If the current employees work properly and well in line with the tasks that we are assigned, and efficiently perform their work, they will remain in the Bank. If you have employees who do consciously make the wrong decision, probably, these employees will have to get rid of,” said the Chairman of the Central Bank.
Shareholders no of shares
The second stage of financial restructuring will take three to five months, during which will be approved, in fact, the rehabilitation plan, which will implement the management company (UK) Fund consolidation. At the time of the interim administration of UK will suspend the rights of shareholders, including the right to convene a General meeting.
At this stage, to be held to issue additional shares of the Bank, which will redeem the Central Bank, causing the regulator will become the owner of at least 75% of the shares of the Bank. Current owners will be able to save 25% only in case of absence of “hole” in the capital of the credit institution.
However, according to senior Director Fitch Ratings Alexander Danilov, count on it not worth it. “While shareholders in words and expect to retain a 25% stake in the Bank, not much chance of that,” said he.
While the Central Bank did not discuss the possible participation of the owners of the Bank in its capital, said Pozdyshev. “We must wait for the results of the evaluation. If the assessment will allow the owners to remain minority owners, then the issue will be discussed”, – he explained.
Himself he considers the possibility of redemption of the Bank Fund consolidation after the financial recovery. “For me, the Bank is more than just a Bank. So I feel it on the fingertips. I understand the opportunities that the Bank has and how technologically structured correctly and built the Bank – this is a very strong platform for further development. Yes, of course, if there is opportunity,” he said in an interview with RBC. Withdraw from the Bank your money Shishkhanov, according to him, no plans.
Would be and BFL
If the audit interim administration adequacy core capital of the Bank falls below the threshold, its subordinated debt will be converted into equity or written off.
According to analyst S&P Anastasia Turdyeva on June 30, the amount of the obligation of the Bank amounted to about 13 billion rubles. This is reflected in the reporting according to IFRS “hybrid instruments of capital that can be written off or converted into equity at the decision of the Bank’s management or reduction of capital adequacy ratio to threshold values”. These funds were provided by the Bank’s shareholders and related parties, she said TASS.
Also unclear is the fate of Federal bonds allocated for the recapitalization of the Bank in 2015 and 8.8 billion rubles. The Ministry of Finance, according to the Deputy head of the Ministry Alexei Moiseev, yet not parted with the hope to return them. “We need to work on this issue, but, well, we didn’t break up with this hope,” said Moses.
“Sibusiso” does not mean “tired”
As noted Pozdyshev, “this story absolutely does not fit into the “tired owners”. “Tired owners”, according to him, this is a bona fide owner of the Bank, which normally works and additional capitalization needs, but for some reason does not want to do this business.
In future, the Central Bank is considering temporary purchases of banks through Fund consolidation, said Pozdyshev.
Despite the apparent contradiction of this approach with the decision by the Bank, it “will not be played back”, said the Chairman of the Central Bank. The regulator cannot afford to make a decision, make it public, to provide citizens, creditors and counterparties of the solvency and financial support to the Bank, and then due to some circumstances this decision to withdraw, said Pozdyshev.