On revocation of banking licence from credit institution Legion and appointment of provisional administration
By its Order No. OD-1891, dated 7 July 2017, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Joint-stock Commercial Bank Legion (Joint-stock Company) or Legion JSCB (registration No. 3117) from 7 July 2017. According to the financial statements, as of 7 July 2017, the credit institution ranked 157th by assets in the Russian banking system.
The key area of activity pursued by Legion JSCB was financing of investment projects implemented by persons connected with the bank for the benefit of shareholders. The credit institution took measures to avoid the compliance with the supervisor’s requirements calling for the appropriate assessment of credit risks assumed. Creation of required loss provisions for certain low-quality assets revealed a full loss of capital by Legion JSCB. Additionally, the credit institution’s financial standing has deteriorated considerably as a result of missing valuables (in large amount) from the bank’s till.
The Bank of Russia has repeatedly applied supervisory measures to Legion JSCB, including restrictions and prohibition on household deposit taking.
The management and owners of the bank failed to take effective measures to normalise its activities. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence from Legion JSCB in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.
The Bank of Russia took such an extreme measure because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, equity capital adequacy ratios below two per cent, decrease in bank equity capital below the minimum value of the authorised capital established as of the date of the state registration of the credit institution, and given the repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
By its Order No. OD-1892, dated 7 July 2017, the Bank of Russia has appointed a provisional administration to Legion JSCB 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 have been suspended.
Legion JSCB is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
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07.07.2017 00.00.00