Rus­sia to merge 3 bad banks into 1

Banking Frontiers - - News | Regulator -

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.

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