- Regulator takes aim at Rosinterbank, Military-Industrial Bank
- Two lenders together hold 81 billion rubles in retail deposits
The list of Russian lenders to fall victim to Bank of Russia Governor Elvira Nabiullina’s push to clean up the industry may be about to get longer.
Two top-100 banks were placed under the temporary administration of the Deposit Insurance Agency this week, according to statements on the regulator’s website. The lenders, Rosinterbank and Military-Industrial Bank, together hold 81 billion rubles ($1.2 billion) in retail deposits, data compiled by Interfax show.
The central bank has moved to shut down lenders deemed under-capitalized or mismanaged since Nabiullina took charge three years ago, with the governor telling President Vladimir Putin this week that every 10th bank -- or a total of 68 -- has lost its license so far this year. From 2013 to 2015, Russia spent nearly one quarter of the 3.3 trillion rubles it provided to prop up the banking industry on compensation for retail depositors in collapsed firms, according to a September presentation by Fitch Ratings.
“The central bank is continuing to clean up the banking sector,” said Mikhail Ganelin, an analyst at Aton LLC in Moscow. “If with small banks it simply pulls licenses for violating money-laundering laws, it moves more slowly with big ones that have troubled assets in order to assess the situation.”
Rosinterbank and Military-Industrial Bank are among the biggest banks to be targeted since the regulator shut down Vneshprombank in January. Temporary administration is often the first step toward revoking a bank’s license.
As grounds for its actions, the central bank described Rosinterbank’s finances as “unsteady” and said Military-Industrial Bank posed a threat to the interests of its creditors and depositors.
Military-Industrial Bank’s central office didn’t answer calls seeking comment and phones weren’t working at Rosinterbank. In a statement this week, Military-Industrial Bank apologized to its customers and said its clients’ requests are being reviewed on an individual basis. Rosinterbank’s website wasn’t working on Friday.
Banks placed under temporary administration usually can no longer comment on their operations.