The Bank of Russia has revoked as of November 24 a banking license held by Bank Baltika (Moscow, Registration No. 967), the regulator's press service reported.
The Bank of Russia decided to act so as the lending institution failed to fulfill federal laws regulating banking activities and the Bank of Russia's statutory acts, and measures provided for in the Federal Law "On the Central Bank of Russia (Bank of Russia)" were applied during the year, and also taking into account a real threat to the interests of the bank's creditors and deposit holders.
Bank Baltika invested funds in poor quality assets and failed to form loan loss provisions that are adequate to the accepted risks and other assets, the regulator specified. "In the upshot, while fulfilling demands of the supervisory body to compile provisions adequate to the accepted risks the lending institution fully lost a substantial portion of its equity (capital)," the Bank of Russia's press service said. Moreover, the lending institution participated in large-scale suspicious transactions, including to wire funds abroad. The bank's management and owners took no measures required to normalize the bank's operation.
A temporary administration team was appointed at the bank. In accordance with federal laws the powers and authority of the lending institution's executive bodies were suspended.
Bank Baltika is a member of the national deposit insurance system.
Banki.ru wrote on November 23 that Bank Baltika has been cut off the Bank of Russia's Banking Electronic Speedy Payment (BESP) system since November 16, closed its divisions in Moscow and other cities. Only two of eight operating additional offices in Moscow, Saint Petersburg, Kaliningrad, Rostov-on-Don, and Samara, remain operative.
In early January the Bank of Russia reported that the reorganization of Moscow-based N-Bank and Bank Baltika by folding them into Krasnoyarsk-based Bank Enisei began. But in summer Bank Enisei decided not to take over as many as two lending institutions. "The bank's strategy is under review. It's easier to merge two banks than three ones. For this reason, we decided to take over banks with smaller capitals (Bank Enisei and N-Bank), and to launch the merger with Bank Baltika," Bank Enisei management board chairwoman Irina Antipina noted.
