Three years into her purge of the country’s banking sector which to date has seen 276 financial institutions driven out of business and a further 28 put through the regulator’s financial rehabilitation programme, the Central Bank of Russia’s Elvira Nabiullina has been named Europe’s best central banker for 2016 by the UK magazine The Banker. (more…)
Russian Central Bank’s purge of the country’s banking system claimed its biggest scalp this week when it announced that it was revoking Vneshprombank’s licence after ruling that its liabilities exceeded its assets by as much as $2.4bn and accusing its management of plundering assets “over a long period of time” and of falsifying accounts. “The prospect (more…)Bloomberg Read More»
The China International Payment System (CIPS), China’s answer to the SWIFT secure financial messaging service, officially came into operation yesterday. CIPS “will allow increasing efficiency of cross-border settlement in yuans and encourage the yuan’s use globally,” the deputy governor of the People’s Bank of China Fan Yifei told guests at an opening ceremony in Shanghai.
The new payment system (more…)
Russian bank purge: The Central Bank of Russia (CBR) last week revoked the licence of the Admiralteisky Bank after riot police officers were called in to stop angry depositors from trying to break its doors down. The bank has been forced out of business partly because it did not have enough reserves, partly because it had processed large suspicious payments, partly because it was not observing anti-money laundering rules and finally because it “practically stopped serving its clients” this month, according to a statement released by the CBR.
It becomes the 140th bank to have its licence revoked since 2013 when the newly appointed CBR chief Elvira Nabiullina began her drive to clean up the banking sector, although she has been less successful in bringing those responsible to justice. The most high-profile victims of the purge have been:
- Trust Bank, one of the country’s top 40 banks, collapsed at the end of December 2014 after depositor panic obliged the authorities to bail it out to the tune of $1.86bn – the second biggest banking bailout in Russian history. The financial institution had used US actor Bruce Willis in a high-profile advertising campaign that played on the bank’s name — but could not cope with the crash in the rouble’s valyes, growing bad assets and an outflow of deposits. The Central Bank said at the time that Trust managers had siphoned off assets and falsified the bank’s accounts. In April, criminal cases on fraud charges were opened against Ilya Yurov, the main shareholder of Trust Bank, and a series of his top managers. Yurov is believed to have moved to London.
- Even the presence of Putin’s cousin Igor Putin on its board could not save Master Bank, whose licence was revoked in November 2013 with the CBR alleging that it had violated money laundering legislation and processed large suspicious transactions. Its bailout cost the CBR almost $1bn. The bank’s CEO (and reportedly its major shareholder) Boris Bulochnik was never charged and is reputed to be living in Israel.
- Last month’s collapse of Probusinessbank, which counted several large Western funds among its investors, last month signalled the end of Russian financier Sergei Leontyev’s 20-year-old banking empire and his Life financial group. The Central Bank said there was a $989m hole in the lender’s balance sheet, citing a loss of capital, fictitious bonds and investments in poor quality assets. Immediately after the announcement that Probusinessbank was being taken into administration by the Central Bank, Leontyev told employees that he was leaving the country, explaining that “Russia is not ready for such a financial group.”
- In July, the CBR withdrew the license of Russia’s 45th largest bank Rossiisky Kredit, one of four financial institutions controlled by Anatoly Motylyov to be closed down within a matter of days. Motylyov has subsequently disappeared.
- The collapse of Mosoblbank in May 2014 and the withdrawal of its licence triggered a $1.7bn bailout. Two other banks owned by Andzhei Malchevsky and his son Alexander – Inresbank and Finance Business Bank – were closed down at the same time. Investigators allege that they and their senior management siphoned off over $1bn from its depositors. Former Mosoblbank chief executive Viktor Yanin was sentenced to a six-year prison term earlier this year, while deputy chief executive Yulia Zendina and Andzhei Malchevsky were arrested in June. Deputy chief executive Dmitry Vasilyev and Alexander Malchevsky were arrested in absentia by a Moscow court in August and put on an international wanted list. They are believed to have fled to Latvia.
Russian capital outflow totalled $ 52.5bn for the first six months of 2015, according to figures released by the country’s central bank (CBR) this week, with the Ministry of Finance suggesting that the crisis may now be past it peak. Capital outflows in the second quarter of 2015 (more…)Gazeta Read More»
Russian bank purge: Central Bank of Russia chief Elvira Nabiullina took the tally of bank licences she has revoked since taking up her post in July 2013 to 100 today, when she added the Moscow-based MAST and TEST banks to her list of victims.
Both banks’ licences have been rescinded on the grounds they had contravened laws designed to stamp out the laundering of proceeds from crime and to prevent the financing of terrorist activities.
The Central Bank in Moscow today cut Russian interest rates for the fourth month in a row as it tries to stimulate the country’s ailing economy. The rate now stands at 11.5%, down from a peak of 17% last December. The Bank made the decision “taking account of lower inflation risks and persistent risks of considerable economy cooling.” Although inflation (more…)
With the rouble rallying against the dollar and the euro , the Central Bank of Russia (CBR) yesterday announced that it was bringing down its key interest rate from 14% to 12.5%. “Amid rouble appreciation and significant contraction in consumer demand in February-April 2015, monthly consumer price growth is declining and annual inflation is tending to stabilize,” it said in a statement. The CBR estimates (more…)rbth Read More»
The Russian economy will return to a period of high growth in 2017 after stabilising next year, the first deputy chairman of the Bank of Russia Ksenia Yudaeva predicted today. The damage caused by the rouble’s nosedive would only last a few months, she forecast, after which things would level off. KPRead More»