Press Service

The Central Bank of the Russian Federation (Bank of Russia)

Press Service

12 Neglinnaya Street, Moscow, 107016 Russia;
www.cbr.ru

Information Notice

Banking licence of TRADE FINANCE BANK revoked and provisional administration appointed

By its Order No. OD-2533, dated 28.09.2018, the Bank of Russia revoked the banking licence of the Moscow-based credit institution JOINT-STOCK COMPANY COMMERCIAL BANK TRADE FINANCE BANK or JSC CB BTF-Bank (Registration No. 1982). According to its financial statements, as of 1 September 2018, the credit institution ranked 292th by assets in the Russian banking system.

The business model of JSC CB BTF-Bank was largely designed to serve the interests of its shareholders and affiliated persons. Outstanding loans to companies explicitly or implicitly related to the ultimate beneficiaries of this credit institution accounted for about 45% of the credit portfolio. Lending to the said borrowers led to a large volume of impaired assets accumulated on the bank’s balance sheet, including overvalued real estate. The due recognition of the value of real estate belonging to JSC CB BTF-Bank conducted at the regulator’s request led to significant deterioration in the credit institution’s indicators, suggesting the need for action to prevent its insolvency (bankruptcy) and, consequently, a real threat to creditors’ and depositors’ interests. Moreover, the bank conducted opaque operations on a regular basis to conceal the actual amount of risks assumed and comply with prudential requirements in a formal way.

The Bank of Russia repeatedly (6 times over the last 12 months) applied supervisory measures against JSC CB BTF-Bank, including two impositions of restrictions on household deposit taking.

Under these circumstances, the Bank of Russia took the decision to revoke the banking licence from JSC CB BTF-Bank.

The Bank of Russia takes this extreme measure because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ and depositors’ interests.

By its Order No. OD-2534, dated 28 September 2018, the Bank of Russia appointed a provisional administration to JSC CB BTF-Bank 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.

JSC CB BTF-Bank is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’ in respect of the bank’s retail deposit obligations, as defined by law. The said Federal Law provides for the payment of indemnities to the bank’s depositors, including individual entrepreneurs, in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor.

28 September 2018

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