CBR strips troubled lender Uralliga of license

The Bank of Russia cancelled a banking license held by Uralliga (Registration No. 1626), the regulator’s press service reported. Last week the lending institution said it faced financial problems.

Uralliga failed to execute federal laws regulating banking activities and CBR’s statutory acts, the bank’s capital adequacy ratio dropped below 2% and own funds (capital) fell below the minimal amount of the charter capital that the Bank of Russia set as of the date of the lending institution’s state registration, the Bank of Russia pointed out. The regulator took into account that during 12 months it took the measures provided for in the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)” with regard to Uralliga many times.

Uralliga “pursued a high-risk credit policy and formed no adequate reserves against possible losses commensurate with the assumed risks. Upon fulfillment of the supervisory body’s demands to form adequate reserves against low-quality loans the bank fully lost its own funds (capital). The bank’s management and owners took no measures to rehabilitate the bank. Under the circumstances the Bank of Russia fulfilled the duty as to revoke the lending institution’s banking license,” said materials posted on the regulator’s website.

The media wired last Friday that the Bank of Russia banned Uralliga to open bank accounts for businesses that are not the bank’s founders or participants, and also settlements through CBR’s payment system and through correspondent accounts opened at other institutions. Moreover, limits were imposed on money transfers to the budgets at all levels at the request of legal entities.

On its website the lending institution said it was in talks with the Bank of Russia and a potential shareholder. The day before the news broke that Vladimir Karamanov, first deputy general director at Korporatsiya razvitiya, might become the bank’s new shareholder. The lending institution decided to send a letter to first deputy CBR chairman Alexei Simanovsky about rehabilitation measures using Karamanov’s funds.

In addition, representatives of the Chief Directorate of the Bank of Russia in the Chelyabinsk region told Banki.ru that until November 25, 2013 a decision was to be adopted to take new shareholders on board. The Bank of Russia pointed out that issue is a non-financial group, “a private investor from Moscow”.

The lender explained problems by a decline in the capital to negative values following the formation of additional reserves against losses under loans issued to a group of Nichmas’s affiliated companies.

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