Banking licence of Kamchatcomagroprombank revoked and provisional administration appointed
By its Order No. OD-207, dated 30 January 2019, the Bank of Russia revoked a banking licence from the credit institution Joint-stock Company KAMCHATSKY COMMERCIAL AGROPROMBANK, or Kamchatcomagroprombank (Reg. No. 545, based in Petropavlovsk-Kamchatsky), further also referred to as the credit institution. According to its financial statements, as of 1 January 2019 the credit institution ranked 297th by assets in the Russian banking system.
PJSC Kamchatcomagroprombank provided loan services to legal entities and individuals including those related to the bank. Dubious and non-performing outstanding loans make up over 70% of its loan portfolio. The credit institution consistently underestimated credit risk assumed, resulting in the Bank of Russia having repeatedly requested that PJSC Kamchatcomagroprombank create additional loss provisions. The due diligence check of credit risk at the regulator’s request established a substantial decrease in capital and entailed the need for action to prevent the credit institution’s insolvency (bankruptcy), which created a real threat to its creditors’ and depositors’ interests.
The Bank of Russia repeatedly (four times over the last 12 months) applied measures against PJSC Kamchatcomagroprombank.
The credit institution’s operations showed signs of misconduct by its executives who sought to withdraw liquid assets to the detriment of creditors’ and depositors’ interests. The Bank of Russia will submit information about the bank’s transactions suggesting a criminal offence to law enforcement agencies.
Under these circumstances, the Bank of Russia took the decision to revoke PJSC Kamchatcomagroprombank’s banking licence.
The Bank of Russia takes this 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, 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.
Following the banking licence revocation, PJSC Kamchatcomagroprombank’s professional securities market participant licence was also cancelled.
By its Order No. OD-208, dated 30.01.2019, the Bank of Russia appointed a provisional administration to PJSC Kamchatcomagroprombank 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.
PJSC Kamchatcomagroprombank is a member of the deposit insurance system. The revocation of a banking licence is an insured event as stipulated by Federal Law ‘On the Insurance of Deposits with Russian Banks’ in respect of the bank’s deposit obligations. This Federal Law stipulates the procedure and amount of insurance indemnities to the bank’s depositors.
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