UPDATE: Russian cbank starts bailout procedures at Promsvyazbank

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MOSCOW, Dec 15 (PRIME) -- The Russian central bank has launched a bailout of Promsvyazbank, 10th largest by assets as of November 1, by using the Banking Sector Consolidation Fund, the authority said in a statement Friday.

No moratorium on creditor demand fulfillment was introduced. Promsvyazbank has continued normal activities fulfilling its liabilities and signing new deals.

The central bank said it will provide money to support liquidity of Promsvyazbank and financial support to guarantee the continuity of service of the bank due to its systemic importance.

Business daily Kommersant reported earlier on Friday citing sources familiar with the situation that the central bank decided to appoint an interim administration at Promsvyazbank. The decision was made on Thursday and the launch of bailout procedures at the bank were not ruled out, the daily reported.

A Promsvyazbank call center specialist told PRIME that Promsvyazbank continues to provide services to clients as usual and asks to pay no attention to media reports about its bailout.

According to Kommersant, Vozrozhdenie Bank will not enter the scope of bailout procedures and is likely to be sold to an investor. The majority owners of the bank decided earlier in 2017 not to merge with Promsvyazbank.

The beneficiary owners of Promsvyazbank, Dmitry and Alexei Ananyev, will probably lose a right to own large stakes in banks and occupy high-ranking positions in them, Kommersant reported.

Business daily Vedomosti reported on Thursday that the central bank demanded that Promsvyazbank raise reserves by about 130 billion rubles. Promsvyazbank denied the report and said that the information concerned a check by the central bank completed in May and that a final report has not been confirmed yet.

In August, Alfa Capital analyst Sergei Gavrilov warned clients of the company about problems at Otkritie Financial Corporation (FC) Bank, B&N Bank, Promsvyazbank, and Credit Bank of Moscow. Since then, the central bank has launched financial recovery procedures at Otkritie FC Bank and B&N Bank.

(58.7082 rubles – U.S. $1)

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