The Bank of Russia has revoked effective July 27, 2016 a banking license held by BFG-Credit (Registration No. 3068, Moscow), the regulator's press service reported.
The decision to take the last-resort measure was adopted because the lending institution failed to fulfill federal banking laws and also the Bank of Russia's statutory acts, capital adequacy ratios dropped beneath 2%, equity (capital) dropped below the minimum charter capital as specified on the date of the lending institution's state registration and taking into account the multiple application during the year of the measures provided for in the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)".
"With bad quality assets, BFG-Credit inadequately assessed accepted risks. A proper assessment of the bank's credit risk and objective reflection of the asset value in the bank's financial statement resulted in the full loss of its equity (capital). The bank's management and owners took no efficient measures to bring its operations back to normal," the Bank of Russia said in a press release.
Due to the considerable imbalance between assets and liabilities it was not found possible to rehabilitate BFG-Credit on reasonable economic terms by attracting the DIA and its creditors. Under the circumstances, based on Article 20 of the Federal Law "On Banks and Banking Activities" the Bank of Russia fulfilled its duty to revoke the lending institution's banking license.
BFG-Credit is a member of the national deposit insurance system.
As the media previously reported, the Bank of Russia's temporary administration team has worked at BFG-Credit since April 12, 2016. Based on RBC data, the team was introduced as the bank became unable to meet the regulator's demand to make Rub 3 bln of additional provisions against the credit portfolio. The regulator's temporary administration team was introduced for a term of six months.
On April 27, 2016 the Bank of Russia imposed a 3-month moratorium on the satisfaction of the bank's creditor claims. The DIA, which makes settlements via Sberbank with BFG-Credit deposit holders after an insured event that occurred, estimated related payments at Rub 22 bln.
Since the beginning of 2016 BFG-Credit has suffered a loss of Rub 8.5 bln. Furthermore, the bank fully lost equity, while the capital adequacy ratio fell below 2% to 1.89% as of June 1, 2016. Under law, with such indicators the Bank of Russia is required to revoke the bank's license.
