Svyaznoy Bank CEO Evgeny Davydovich confessed to investors that the bank's capital adequacy ratio could fall below 2% by August, and this enables the Bank of Russia to revoke its license.
As of June 1, 2015 the lending institution's capital adequacy ratio stood at 5.5%, the bank violates the Bank of Russia's normative standard, Davydovich said during a conference call with investors about the restructuring of its bonded loan. By August the bank's ratio could drop under 2%, which could lead to the revocation of the bank's license.
Davydovich said that the bank's present shareholders have no funds to push up its capital. "The bank's current shareholders have no opportunity to inject funds into the bank, and any issue about the bank's future strategy sounds irrelevant. The lender's entire strategy was simplified to just one thing, i.e. to collect loans granted and pay funds to the deposit holders," he admitted.
The only positive scenario, according to him, is the bank's rehabilitation, if the Bank of Russia decides so. "So far, there's been no rehabilitation institution of this kind," the bank's chief executive said.
For the record, last week Svyaznoy Bank addressed its series 1 bond holders with a proposal to restructure the bonded loan, which needs to be redeemed in August 2015.
