The Bank of Russia decided to revoke the banking license held by Smolensky Bank (registration #2029) as of December 13, the regulator’s press service reported.
The Bank of Russia noted that Smolensky Bank’s rehabilitation with the involvement of the Deposit Insurance Agency (DIA) was not possible due to the lending institution’s poor asset quality. Based on the regulator’s data, Smolensky Bank failed to timely fulfill its obligations to creditors or deposit holders.
Moreover, as the Bank of Russia specified, Smolensky Bank withdrew assets, executing relevant transactions for this purpose. The bank also failed to execute the supervisory body’s demand to form provisions against possible loan losses, while financial statements submitted to CBR were unreliable. The financial statements concealed the real state of affairs at the lending institution and the full loss of capital.
As Banki.ru previously reported, on November 29, 2013 Smolensky Bank suspended account operations, referring to a glitch. After this the financial institution’s executives sent a request to the Bank of Russia seeking a stabilization loan. Without waiting for the regulator’s decision, Smolensky Bank began to sell off its credit portfolio. News broke on December 9 that the lending institution’s offices stopped serving clients. The bank’s units did not resume activities as the Bank of Russia was expected to make a decision on the bank’s possible rehabilitation.
On December 10, 2013 Smolensky Bank board chairman Pavel Shitov wrote in his microblog on Twitter with no shame that he expects the bank’s license to be revoked this very day, but his forecast turned out to be not quite accurate.
Meanwhile, the media wired that on December 12, 2013 Smolensky Bank wrapped up the acquisition of a 100% voting stake in Bank Ascold. However, the future of the bank, which was to be folded into Smolensky Bank, has so far been unknown.
