February 17, 2015 | Cbonds
|By its Order No. OD-366, dated 16 February 2015, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Commercial Bank Sudostroitelny Bank, limited liability company, or SB Bank LLC (Registration No. 2999) from 16 February 2015.|
The Bank of Russia took such an extreme measure — revocation of the banking licence — because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, revealed facts of significant unreliability of reporting data, all capital adequacy ratios below 2%, decrease in equity (capital) below the minimal amount of the authoruised capital established as of the date of the state registration of the credit institution, inability to meet the creditors’ claims on monetary obligations, and taking into account the application of supervisory measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
SB Bank LLC implemented high-risk lending 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). Due to the loss of liquidity SB Bank LLC failed to timely meet its obligations to creditors. Besides, the bank presented significantly unreliable financial statements to the Bank of Russia, which disguised the reasons for application of insolvency (bankruptcy) prevention measures, and failed to meet the supervisory authority’s requirements on representing all the defaulted obligations in the financial statements.
The management and owners of the credit institution did not take measures to normalise its activities. Due to the low quality of assets of the credit institution, it was impossible to perform financial resolution of SB Bank LLC with the participation of the state corporation Deposit Insurance Agency on reasonable economic terms. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence from the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.
By its Order No. OD-367, dated 16 February 2015, the Bank of Russia has appointed a provisional administration to SB Bank LLC for the period until the appointment of a receiver pursuant to the Federal Law ‘On the Insolvency (Bankruptcy)’ or a liquidator under Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In accordance with federal laws, the powers of the credit institution’s executive bodies are suspended.
SB Bank LLC is a member of the deposit insurance system. The revocation of banking licence is an insured event envisaged by Federal Law No. 177-FZ ‘On Insurance of Household Deposits with Russian Banks’ regarding the bank’s liabilities on deposits of households determined in accordance with the legislation.
According to the financial statements, as of 1 January 2015, SB Bank LLC ranked 85th by assets in the Russian banking system.
Company: Sudostroitelny Bank
|Full company name||Commercial bank "Sudostroitelny bank" (LTD)|
|Country of risk||Russia|
|Country of registration||Russia|