On settlement of obligations of JSC Bank Sovetsky

The Bank of Russia made a decision to settle obligations of Joint-stock Company Bank Sovetsky or JSC Bank Sovetsky (registration number 558, the city of Saint Petersburg).

The settlement of a credit institution’s obligations is aimed to protect the interests of creditors and depositors of a bank.

The Bank of Russia has approved the Plan for the state corporation Deposit Insurance Agency (hereinafter, the Agency) to participate in settling the obligations of JSC Bank Sovetsky. According to the Plan, the Agency shall hold a competitive selection of an acquirer within timeframe which will allow to satisfy the claims of first-priority creditors in the regions of presence of JSC Bank Sovetsky within 14 days after the approval of the Plan of the Agency’s participation in the settlement of the bank’s obligations. The actual settlement of the bank’s obligations shall be conducted after the revocation of its banking licence.

A credit institution, assigned with the obligations of JSC Bank Sovetsky, will continue to service its depositors on the same conditions, including deposit interest rates and maturities. The settlement of obligations of JSC Bank Sovetsky will allow to satisfy first-priority creditors’ claims in full (including the cases, when deposits exceed the insurance coverage of 1.4 million rubles) without incurring financial damages to the bank’s depositors.

It is planned that the bank’s obligations to second-priority creditors (claims on severance payments, claims of persons who work/worked under labour contracts, etc.) shall be repaid in full.

Obligations to third-priority creditors (excluding the Agency) are currently estimated at roughly 0.1 billions of rubles, including the account balances of the bank’s corporate customers totalling an estimated 0.01 billions of rubles. The remainder of the obligations mainly comprises settlements with other creditors, outstanding settlements and funds transfers. The corporate customers of JSC Bank Sovetsky have been questioned about the reason why they use the services of this bank. As a result, it was established that these customers were unable to close their accounts.

By its Order No. OD-1654, dated 03.07.2018, the Bank of Russia revoked the banking licence from the credit institution JSC Bank Sovetsky from 03.07.2018.

The Bank of Russia took this decision because of the credit institution’s equity capital adequacy ratios below two per cent, decrease in the equity capital below the minimum value of the authorised capital established as of the date of the state registration of the credit institution.

Following this banking licence revocation, the professional securities market participant licence of JSC Bank Sovetsky was revoked. Furthermore, in accordance with Bank of Russia Order No. ОD-1655, dated 03.07.2018, the activities of the provisional administration to manage the credit institution were terminated (the provisional administration was appointed in accordance with Bank of Russia Order No. OD-455, dated 21.02.2018).

By its Order No. OD-1655, dated 03.07.2018, due to the revocation of the banking licence of JSC Bank Sovetsky and due to the Agency’s decision to participate in the settlement of the bank’s obligations, the functions of a provisional administration to manage the credit institution have been vested with the Agency for the period until the appointment of a receiver pursuant to the Federal Law ‘On 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 were suspended.

According to the financial statements, as of 01.06.2018, JSC Bank Sovetsky ranked 111th by assets in the Russian banking system.

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