Russia to merge 3 bad banks into 1
Bank of Russia proposes to transfer assets from 3 collapsed banks into Trust, which is another failed bank in the country. Trust, which is often described as a bad bank, will receive a Rbs11trillion loan at a non-market interest rate of 0.5% for a year before eventually surrendering its banking license once the debts are recouped or written off. It is estimated that 40 to 60% of its total assets could be repaid within 3 years. The largest of the 3 failed banks, Otkritie, was Russia’s biggest privately held bank by assets until it was nationalized in August. The central bank then nationalized B & N Bank, another top-10 lender, and Promsvyazbank to stop them from going under. Governor Elvira Nabiullina decided to merge Otkritie with B & N in the hope of selling it in an IPO by 2020.