Photo: Alexander Scherbak/TASS
To save and preserve why the authorities will help the Bank of the ROC to avoid bankruptcy
Bank of the Russian Orthodox Church has restricted the issuance of deposits
18 Oct, 12:22
Bank “Peresvet” is connected to the electronic payment system of the Bank of Russia (BESP), told RBC two sources in the banking market. This means that operational control is fully transferred to the interim administration, experts explain
The Bank of Russia has connected “Peresvet”, the main shareholder is the Russian Orthodox Church (ROC), to the electronic payment system, RBC reported a source in the banking market. Information was confirmed by the Treasurer of another Bank who knows about this from one of her customers “Peresvet”. “Apparently, it means that the operating control is fully transferred to the interim administration,” he said.
Previously on connecting banks to the system reported by”RIA Novosti” , citing a source in banking circles. The Central Bank declined to comment.
“Peresvet” is disconnected from this system on Friday morning, October 21. Soon, the regulator announced the introduction of temporary administration in the Bank and a moratorium on satisfaction of creditors ‘ claims.
ROC owns more than 49% of the “Peresvet”, another 24% are owned by the chamber of Commerce (CCI). On Friday, October 21, the Central Bank introduced the Bank a temporary administration for a period of six months and has announced a moratorium on satisfaction of creditors ‘ claims. The introduction of an interim administration followed after the Bank has limited the issuance of deposits to natural persons and disappeared predpravleniya Bank Alexander Shvets. The regulator also said that the Bank has not performed more than seven days the claims of creditors.
Analysts of Raiffeisenbank in his review on Monday admitted the probability of liquidation of Bank “Peresvet”. They believe that given the depletion of the Fund the DIA this will create minimal burden on the state represented by the Central Bank. “In our view, if a similar situation the Bank faced a year ago, the reorganization would be the most likely outcome, given the composition of shareholders and legal persons locating funds in the Bank. However, now that the Fund’s DIA already exhausted, the decision can be made based on considerations of the minimum load state in the face of the securities, that is quite likely and liquidation,” — said in the daily review of the Bank.
Experts suggest not to jump to conclusions before the interim administration will determine the amount of liquid assets. Monday, October 24, the newspaper “Kommersant” with reference to sources reportedthat the volume of the hole in the Bank tens of billions of rubles, which at times exceeds the insured liability ASV, which further plays against the decision on reorganization of the Bank.
“The choice between reorganization and bankruptcy should be the evaluation of asset quality. If it turns out that the volume problem is not very large, it is logical to sanitize,” said RBC senior Director financial institutions Fitch Ratings Alexander Danilov. According to him, in the same case, if the hole size exceeds the amount of guaranteed deposits and the recapitalisation of the Bank will require more money than payments to depositors from the Fund of the ACB, respectively, it is better to bankrupt. However, says the expert, if the shareholders would be willing to help partially or completely cover the problem assets, the balance might weigh in favor of rehabilitation.
However, Daniel adds that “there may be other arguments in favor of rehabilitation, for example, reputational risks or risks of losses for state-owned companies that held money in the Bank”.
Monday, October 24, Fitch ratings downgraded the Issuer default rating (IDR) of the Bank “Peresvet” to the default-level D from B+. The Bank’s rating was also removed from CreditWatch with possible further downgrade. “Fitch withdraws the ratings in the event of bankruptcy/liquidation of the Bank. Fitch could upgrade the ratings if the Bank would receive support sufficient to restore its solvency,” — said in a press release from the Agency.
Earlier, on 20 October another international Agency Standard & Poor’s downgraded the credit rating on liabilities in national and foreign currencies “Peresvet” from In+/In-to CCC-and put the Bank’s ratings on CreditWatch with negative implications. The reason for this was the introduction of the Bank of restrictions on cash withdrawals, followed by press release Agency.
Bank “Peresvet” recently felt confident enough, and the external signals to the problems with the deposits was not there, told RBC former head of the Synodal Department for cooperation of Church and society, father Vsevolod Chaplin. He reminded that the ROC had problems with deposits with other banks — “Sofrino” and Vneshprombank. “Churches need to move away from percentages and to develop interest-free financial system. Recently, in the Orthodox environment were voices that need to go back to the old rules, which forbid the clergy to take interest. And now these reminders were ignored,” — says Chaplin.