Every tenth Russian bank will have its licence revoked over the course of 2016, the head of Russia’s largest lender Sberbank CEO German Gref predicted this week, as the the two-year purge instigated by the Central Bank of Russia’s (CBR’s) chief Elvira Nabiullina looks set to continue. Since she was appointed in 2013, 200 banks have lost their licences, usually either for money laundering or for lending against insufficient capital:
- 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- Even the presence of Putin’s cousin Igor Putin on its board could not save Master Bank, whose licence was revoked in November 2013 with the CBR alleging that it had violated money laundering legislation and processed large suspicious transactions.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.
- The collapse of Probusinessbank, which counted several large Western funds among its investors, 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.