PRESS: Russia cbank wants to put any bank into consolidation fund

MOSCOW, Nov 17 (PRIME) -- Russia’s central bank has suggested amending regulations to allow to transfer any banks, even healthy institutions, to a banking consolidation fund, First Deputy Chairman Dmitry Tulin said in an interview to business daily Vedomosti published on Thursday.

“There are some conceptual ideas, like work with so-called tired owners. These people entered the banking business a long time ago, this business is almost a family business for them, and they are unable to leave it. They cannot sell it as there is no demand, cannot close it or transfer it to anyone, and have no money to develop it. We hope that the consolidation fund will be able to help them leave the business with dignity,” Tulin said as cited by Vedomosti.

Former owners of banks will be able to receive a stake in a larger bank when the fund merges its assets, like under a deal with deferred liabilities. “This may happen, say, in two years, if the credit portfolio that an owner had transferred (within the bank) is serviced,” he said.

“Since 2013, we have seen something strange happening, as many people – owners and managers – started doing things that we had not expected at all. The consolidation fund may become a possibility for them to stop.”

Mikail Shishkhanov, co-owner of B&N Bank, said that the tired shareholder effect is present on the banking and other markets due to the difficult economic situation. “And a chance to transfer barely alive banks to the fund is relevant,” he said.

A co-owner of one of the top-100 Russian banks told Vedomosti that he is tired from owning a bank. “But it is very unlikely that I will go to the central bank and give my bank away, though the idea sounds interesting,” he said.

End