On revocation of banking licence of credit institution Vyborg-bank and appointment of provisional administration

By its Order No. OD-2965, dated 7 September 2016, the Bank of Russia revoked the banking licence of the credit institution Public Joint Stock Company Vyborg-bank or PJSC Vyborg-bank (Registration No. 720, Vyborg, Leningrad Region) from 7 September 2016.

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, because the capital adequacy ratio of this credit institution was below 2%, and taking into account the repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

PJSC Vyborg-bank implemented a high-risk lending policy connected with the placement of funds in low-quality assets. As a result of the fulfillment of the supervisor’s requirements to make provisions adequate to the risks assumed, the capital adequacy of this credit institution fell to critical values. The management and owners of PJSC Vyborg-bank failed to take effective measures to bring the situation back to normal. Moreover, in August 2016 the management and owners of the bank conducted scheme operations aimed at withdrawing assets against the backdrop of restrictions on banking operations imposed by the Bank of Russia.

Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of PJSC Vyborg-bank in accordance with Part 2 of Article 20 of the Federal Law ‘On Banks and Banking Activities’.

By its Order No. OD-2966, dated 7 September 2016, the Bank of Russia has appointed a provisional administration to PJSC Vyborg-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 the federal laws, the powers of the credit institution’s executive bodies have been suspended.

PJSC Vyborg-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 ₽1.4 million per one depositor.

According to reporting data, as of 1 August 2016, PJSC Vyborg-bank ranked 349^th in the Russian banking system in terms of assets.

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07.09.2016 00.00.00