UPDATE: Russian cbank revokes license of top-30 Jugra Bank

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MOSCOW, Jul 28 (PRIME) -- The Russian central bank has recalled the banking license of Jugra Bank, 29th largest by assets as of June 1, the authority said in a statement on Friday.

On July 10, the central bank introduced a three-month moratorium on creditors’ demands at Jugra Bank and appointed the Deposit Insurance Agency (DIA) as an interim administration for six months.

On Wednesday, the Prosecutor General’s Office appealed against the central bank’s steps saying that it had failed to take into account the absence of violations of mandatory standards during inspections.

Nevertheless, the chosen agent banks started to repay deposits to the clients of Jugra Bank and had repaid 63.5% of the insured liabilities as of the Thursday evening.

Alexei Khotin, the core owner of the troubled bank, submitted a financial recovery plan to the central bank, which included redemption of 170 billion rubles to the DIA in 10 years.

The central bank said in its statement that the DIA discovered during its investigation a full loss of capital of Jugra Bank.

“In accordance with an evaluation by the DIA, financial recovery procedures with participation of the agency and creditors were deemed economically unviable due to an extremely low quality of assets and the amount of discovered imbalance between the asset value and liabilities, and taking into account the fact that Jugra Bank is not a systemically important credit organization,” the authority said.

The central bank said that the financial recovery plan by the owner was unrealistic from the point of view of the terms, amount and sources of additional capital and also because some of its stipulations are inconsistent with the law.

The DIA undertakes to repay the remaining loan liabilities of Jugra Bank in accordance with the law.

Former CEO of Jugra Bank Dmitry Shilyayev told PRIME that the owners will continue to stand for the bank and their reputation with all possible means. “We have been absolutely ready for this (license revocation). The strategy of the bank owners – to go all the way and stand for Jugra and the reputation with all possible means – has not changed,” Shilyayev said.

He said that the DIA destroyed the capital of Jugra Bank artificially during the first days as the interim administration.

(59.4102 rubles – U.S. $1)

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