RBC DAILY. On Thursday Rosbank announced the liquidation of Volga Society of Mutual Credit, once part of the financial empire of Alexander Smolensky, a former SBS-Agro owner, who eventually sold his banking business to Rosbank.
As Rosbank told RBC daily, Volga OVK’s winding-up is a technicality, as the bank conducts no operations and has been under liquidation since 2007.
OVK Group banks dated back from Agroprombank that once operated the second-largest network (after Sberbank) of 1,200 units. At that time oligarch Alexander Smolensky appeared on the financial market, he took an interest in the huge network and he eventually came to terms with the government to buy Agroprombank. Alexander Smolensky folded Agroprombank into Stolichny Bank Sberezheniy (SBS), which he already owned. But SBS-Agro that appeared through the merger of the banks fell prey to the financial meltdown of 1998 because of too large investments in government short-term bonds. SBS-Agro owed several billion dollars to foreign creditors and thousands of deposit holders besieged its offices.
“Good” assets were taken out of SBS-Agro to Pervoye OVK, a small bank that Alexander Smolensky bought. SBS-Agro’s branches joined the bank, turning into Central, Siberian, Privolzhie, Volga and Far East Societies of Mutual Credit.
Eventually Alexander Smolensky sold the bank to Rosbank for $200 mln. A year later Rosbank launched a procedure to place these banks on its books, which ended in summer 2005. The reorganization process took quite a long period. The last society of mutual credit was wound up on Thursday.
