PRESS: Russian Regional Development Bank may bail out Peresvet Bank

MOSCOW, Oct 26 (PRIME) -- The Russian Regional Development Bank may take part in financial recovery of Peresvet Bank, Kommersant business daily reported Wednesday citing sources familiar with the matter.

On October 21, the central bank appointed an interim administration at Peresvet Bank, Russia’s 43rd largest bank by assets as of July 1, for six months and introduced a moratorium on fulfillment of liabilities to the bank’s creditors.

Kommersant reported that the most probable scenario regarding the bank is a financial recovery via the bail-in mechanism. The decision has not been made yet, but if the regulator, the Deposit Insurance Agency (DIA), the bank’s owners and its largest creditors agree on the recovery, then the Russian Regional Development Bank is most likely to become the turnaround manager.

Only concessions from Peresvet Bank’s creditors will define chances for the bank’s recovery. “The central bank held a meeting with largest creditors of the bank and said that it will not cover the bank’s capital gap (between assets and liabilities) with its own money. The regulator is ready to provide only 10–20 billion rubles, while the gap amounts to several dozens of billions of rubles. Creditors and owners are to cover the rest,” one of the sources told the business daily.

“The central bank told creditors…and shareholders that if they don’t cooperate and agree on conversion of their liabilities into stock, there will be no help and the bank’s license will be revoked,” another source told Kommersant.

Business daily Vedomosti also reported on Wednesday that the major part of deposits with the bank exceeded the insured amount of 1.4 million rubles. In total, the bank attracted 22.5 billion rubles in deposits from citizens as of October 1, but the DIA will redeem only about 7.4 billion rubles to 14,000 depositors of the bank, a representative of the agency told Vedomosti.

The bank’s largest shareholders are the Moscow Patriarchate of the Russian Orthodox Church with a 36.5% stake, the Chamber of Commerce and Industry’s company Expocentre with a 24.4% stake, and the Russian Orthodox Church’s 100% affiliate Sodeistviye with a 13.2% stake.

(62.0480 rubles – U.S. $1)

End