The Bank of Russia has revoked effective March 17, 2016 a banking license held by National Corporate Bank (Registration No. 3422), the regulator's press service reported.
The Bank of Russia explained its decision to act so as the bank failed to fulfill federal laws regulating banking activities, and also its statutory acts, because its capital adequacy ratios fell below 2%, equity capital dropped beneath the minimum charter capital as set on the date of the lending institution's state registration.
"National Corporate Bank violated banking laws and the Bank of Russia's statutory acts when assessing credit risks. Upon fulfillment of the supervisory body's demand to compile provisions adequate to accepted risks, the lending institution's equity capital dropped to a critical level. Under the circumstances, the Bank of Russia, based on Article 20 of the Federal Law "On Banks and Banking Activities", fulfilled its obligation to revoke the lender's banking license," the regulator noted in a press release.
National Corporate Bank is a member of the national deposit insurance system.
In early March, the Bank of Russia cut National Corporate Bank off Banking Electronic Speedy Payment (BESP) system. Russian rating agency RAEX (Expert RA) lowered the bank's creditworthiness rating to B (low level of creditworthiness). The bank's rating was downgraded due to a sharp rise in regulatory risks associated with its insufficiently conservative policy as to comply with the anti-money laundering law (Federal Law No. 115 dated August 7, 2001).
This January the bank lost nearly half (45%) of its high-liquidity assets, National Corporate Bank's financial statement showed. Meanwhile, the lending institution boosted SME lending by 2,700%.
Corporate loans granted by the bank account for slightly more than a half of the financial institution's assets, or Rub 1.8 bln. The bank's primary sources of funding are retail deposits that stood at Rub 1.6 bln as of February 1, 2016.
