The PR department of the Bank of Russia announced the cancellation of the banking license held by Vostokbusinessbank (VBB, Vladivostok) effective April 14, 2011.
The bank’s banking license was revoked as VBB failed to comply with the federal laws that regulate banking activities and CBR’s statutory acts, instances were established that the lender provided materially misstated reports, because the lender’s capital adequacy ratio dropped below 2%, own funds declined below the CBR-imposed statutory level as of the lending institution’s state registration, and also taking into account numerous applications during the year of the measures stipulated by the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”.
Changes in the bank’s ownership and management were accompanied by putting on books securities that were absent in reality. Meanwhile, the bank provided CBR with materially misstated financial reports, did not fulfill requirements specified in the regulator’s order to perform reliable assessment of its assets and to form adequate reserves against possible losses. Upon receipt of the evidence that the bank lacks assets the Bank of Russia revoked VBB’s banking license in accordance with Article 20 of the Federal Law “On Banks and Banking Activity”.
A temporary administration team was appointed at VBB until the appointment of a receiver in accordance with the Federal Law “On Insolvency (Bankruptcy) of Lending Institutions” or a liquidator in line with Article 23.1 of the Federal Law “On Banks and Banking Activity”. In accordance with the federal laws the powers and authority of the lending institution’s executive bodies were suspended.
For the record, Vostokbusinessbank is a member of the national deposit insurance system. The revocation of a banking license is an accident insured as provided for by Federal Law #177-FZ “On Insuring Household Deposits Held at Banks of the Russian Federation”.
Based on Banki.ru data, as of March 1, 2011 the lender’s net assets stood at Rub 560 mln (811th in Russia), equity (calculated in line with CBR requirements) totaled Rub 180 mln, the credit portfolio amounted to Rub 80 mln and obligations to households equaled Rub 280 mln.
