Bank of Russia cancels Intercommerz Bank license

The Bank of Russia has revoked as of February 8, 2016 a banking license held by Moscow-based Intercommerz Bank (Registration No. 1657), the regulator's press service reported.

The Bank of Russia explained its decision to apply the last resort measure as the lending institution failed to comply with federal laws regulating banking activities and also CBR's statutory acts, because its capital adequacy ratio fell below 2% and its equity declined below the minimum threshold set by CBR on the date of the lending institution's state registration, of the bank's inability to satisfy monetary claims of creditors, and taking into consideration the multiple application of the measures specified in the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)" within a year.

"While holding poor quality assets, Intercommerz Bank inadequately assessed related risks. The proper assessment of the credit risk at the request of the supervisory body showed complete loss of the bank's equity. In addition, the bank got involved in suspicious transit operations," the Bank of Russia said in a press release.

The Central Bank of Russia pointed out that "due to the considerable gap between assets and liabilities the rehabilitation" of Intercommerz Bank with participation of the Deposit Insurance Agency and its creditors "was not possible on reasonable economic conditions". Under the circumstances the Bank of Russia fulfilled its obligation to revoke the lending institution's license, the regulator specified in the press release.

Intercommerz Bank is a member of the national deposit insurance system.

To remind, on January 29, 2016 the Central Bank of Russia appointed temporary administration to manage Intercommerz Bank for six months, on the very day Intercommerz Bank halted customer service and cash operations. Several days prior to the appointment of temporary administration the lender stopped giving funds back from deposit accounts.