Probusinessbank case to be used to test new bank liquidation model
August 14, 2015 IA AK&M
Within two weeks, Russia's Deposit Insurance Agency (DIA) will select a bank to acquire some of the property and liabilities of Probusinessbank for the transfer of the bank's obligations under contracts with private customers (in full), DIA informed.
If the competitive selection procedure is successful, depositors can restore access to their accounts with the acquiring bank. Sole proprietors can claim insurance compensations provided for by the legislation to a agent bank selected in the same period.
For Deposit Insurance Agency, the procedure of transferring the bank's property and liabilities to another bank (the acquiring bank) is the first experience of applying the provisions of the Federal Law "On Insolvency (Bankruptcy)" which took effect in late 2014.
It will be recalled that on August 12, the Central Bank of Russia revoked the banking license from JSCB Probusinessbank. The license revocation, the last resort measure, was motivated by the credit institution's failure to comply with federal banking laws and Bank of Russia regulations. JSCB Probusinessbank implemented high-risk policy connected with placement of funds into low-quality assets. As a result of creating provisions adequate to the risks assumed, the credit institution lost its equity capital.
Probusinessbank (tax number: 7729086087) was established 1993, its authorized capital is RUB 3.438 billion. The bank traditionally offers lending programs to assist businesses. The bank is part of Life Financial Group.
RAS net loss of Probusinessbank for H1 2015 grew 3.5 times to RUB 1.417 billion from RUB 369 million the year before. Loss before tax for H1 2015 was RUB 1.304 billion against RUB 421 million the year before.
As of August 1, 2015, JSCB Probusinessbank ranked 51st in the Russian banking system in terms of asset size.
Company — Probusinessbank