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SB Bank: liquidity problems

Sudostroitelny Bank, or SB Bank, experienced liquidity problems simultaneously with other Russian banks at the end of 2014. For this period, the peak of the economic crisis occurred. The fall of the ruble, the decline in oil prices, unstable foreign economic relations and many other factors affected the development of events.

First official statements

"SB Bank" began to experience problems in its work even before there were official statements. It was January 16, 2015, the difficulties faced by the credit institution, were made public. In fact, the first violations of the rules of work took place at the end of 2014. It was during this period that disruptions in payments of the conversion type began. Sending of funds from accounts in one currency to accounts in another started to take place with a considerable delay. Legal entities faced a daily delay in the transfer of funds. The situation was explained by the company's management as a consequence of excessive customer activity. This was not the end of the problem for the financial institution "SB Bank". By the end of January, the payment of deposits began to be strictly limited, and payment orders were delayed for 2-3 days. The experts managed to fix the difficulties with conducting REPO transactions.

Loud fall

As of December 1, 2014, when the economic imbalance in the country was only getting worse, SB Bank took 80th place in the country in terms of assets. In terms of net profit it belonged to the 22nd position in the ranking. In 2013, the financial institution was among the 20 most active operators in the interbank market. Starting from mid-January 2015, the international agency Standard & Poor's assigned a new rating to the bank. The status of the institution was dropped from the stage "B-" to "CCC", which can be interpreted as a pre-default situation. A forecast was made, according to which there is a high probability of intervention by the Central Bank in the activities of the institution.

The first rumors and negative reviews

"SB Bank" problem could not hide and veil from its customers already at the first stages of their appearance. Difficulties began to emerge by the end of 2014, as mentioned above. Many customers began to complain about the reduction of the overdraft limit, including the old ones. There is a category of people who noted a delay in payments, which became more and more prolonged as the New Year approached. By mid-January, massive claims were filed against the bank due to refusal to pay deposits. There were reports in which clients said that the financial institution arbitrarily changes the date of receipt of payments to the bank. To hide the fact that SB Bank does not make payments, it was not possible. This provoked a powerful outflow of capital and exacerbated the situation.

Lack of chances to solve problems

Financial institution SB Bank did not manage to solve the liquidity problem independently. Having collected from the population deposits of 16.4 billion rubles, the bank simply failed to meet its obligations. As problems arose, there was no improvement in the situation, and the bank's management was not able to explain the reasons for what was happening. The limit on the issuance of funds, which was to become a temporary measure, gradually decreased from 100 to 50 thousand rubles a day. As a result of payment delays, people faced such unpleasant situations as untimely payment of taxes, delays in payments on the loan. Andrei Yegorov, who at the end of 2014 served as president of the financial institution, systematically refused to comment on the situation. He led the bank since 2011 and surrendered his authority, and his place went to Vasily Melnikov.

What determined the situation?

SB Bank does not make payments, does not pay deposits, does not perform conversion operations - these are just a few of the signals that became harbingers of liquidity problems. In the opinion of the counterparty bank, the revaluation of OFZ significantly affected the situation. In particular, on December 16, OFZ, payment on which was scheduled for 2028, fell in price by 12.5 points, which was 53% of the nominal value.

OFZ, the maturity of which was due in December 2019, decreased by 11.2 points - about 65.1% of the nominal value. The source of information close to the management, reported that the amount of funds that had to pay the financial institution of the CBR, exceeded the amount of 2 billion rubles.

Circumstances were supplemented by an increase in the interest rate, an increase in the level of collateral in the exchange, which led to a shortage of collateral. You can add the fact that about 12% of the institution's liabilities, equivalent to 10.2 billion rubles, are the funds raised in the Central Bank.

Why did the economic crisis affect the activities of the bank?

Well-known is the fact that the bank, which appears in the financial sector of the country as "SB Bank", revoked the license due to low liquidity. Many sources report that the cardinal impact on the financial institution on the part of economic changes is justified by the use of a complex funding scheme by the bank, which is characterized by a strong dependence on repo transactions conducted in the Central Bank. Despite the existence of a powerful liquidity cushion, the external conditions formed by the end of 2014 played a role of a trigger in the emergence of topical problems. Analysts and experts already predicted in advance the fact that nobody will take up the recovery of a financial institution. "SB Bank" of Russia just went to the bottom, as well as many of its competitors.

Interim Administration

Shortly after the problem with payments took place in a financial institution called "SB Bank", the Bank of Russia appointed an interim administration. Such a decision, adopted on February 16, was stimulated by the revocation of the license that gives the right to conduct financial transactions. Since the first days of the introduction of the provisional administration, there have been serious confrontations of its activities. As reported in the report, the leadership of the organization "SB Bank", the problems solved by their own forces and failed, refused to transfer originals of loan agreements. It tried to prevent the temporary administration from accessing collateral and guarantee contracts within the framework of loan debts of both legal entities and individuals. This was regarded as a clear evidence of an attempt to withdraw assets from the bank.

This behavior made it impossible not only to satisfy the claims of creditors, but also to obtain legal penalties. Based on the results of the assessment of the financial institution SB Bank, whose liquidity problems were more significant than anticipated, the size of its assets was estimated at 8.9 billion rubles with a volume of liabilities to creditors of 48 billion rubles.

Violations of legislation

Before the revocation of the license, interesting actions of the management of the SB Bank were revealed. What happens in the financial institution, it was possible to understand due to the formation of the register of obligations of the institution. When there were already problems with the solvency of the organization, the creditors' claims were transformed into a privileged order of their fulfillment. There was a breakdown of deposits to the extent that the loss could be compensated through payments from the deposit insurance agency. The actions of the former leadership and the owners of the organization had a hint of criminal activity. Information about them is directed by the Central Bank to the General Prosecutor's Office and to the Ministry of Internal Affairs. One can attest to the fact that a financial institution, known as SB Bank, has been revoked a license on legal grounds.

Payments to victims

According to the official statement of the Deposit Insurance Agency, payments to former customers of the SB Bank structure will be carried out in accordance with the regulations from March 1, 2015 to March 2 of the following year. Get compensation will be in Sberbank, "VTB 24", as well as the rights of an agent bank in the Khanty-Mansiysk Bank "Discovery".

After March 2, 2016, information about the specifics of payments will be presented in a separate order. Compensations are aimed not only at compensation for damage to the owners of deposits, but also for customers who have settlement accounts in the institution. For all open accounts in aggregate, the amount of compensation will not exceed the amount of more than 1.4 million rubles. If there are counter claims from the bank to the depositor, their amount will be deducted from the amount of compensation in accordance with the current regulations of the Deposit Insurance Agency.

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