22 Feb 2018 09:56

Sovetsky Bank becomes fourth lender to be bailed out by CBR

MOSCOW. Feb 22 (Interfax) - One of Russia's oldest banks, St. Petersburg-based Sovetsky Bank, which has travelled a tortuous path to financial recovery in the past few years, has become the fourth lender to be bailed out by the Central Bank of Russia (CBR) through its new bailout mechanism, following Otkritie FC Bank , B&N Bank and Promsvyazbank (PSB) .

The CBR appointed the Deposit Insurance Agency (DIA) to act as the temporary administration to manage Sovetsky in October 2015. Rossiysky Capital Bank was initially brought in to carry out financial recovery measures and provided with funds to support Sovetsky's liquidity. Later, Tatfondbank won a tender to manage the financial turnaround of Sovetsky, but it later collapsed itself.

In February 2017, the CBR approved changes to the plan for the DIA's involvement in measures to prevent Sovetsky's bankruptcy and again appointed the agency as the temporary administration at the lender.

But on Wednesday the CBR announced that it has approved a plan for its own participation in measures to prevent Sovetsky's bankruptcy. As part of this plan, Banking Sector Consolidation Fund Management Company LLC was appointed as the temporary administration at Sovetsky effective February 22.

"One of the first priorities of the temporary administration is to conduct an analysis of the financial position of the bank in order to determine the outlook for further implementation of measures to prevent the bank's bankruptcy. Other measures prescribed by the plan for the Bank of Russia's participation will ensure the continuous operation of the bank for serving clients and carry out existing obligations," the CBR said.