Press Service

The Central Bank of the Russian Federation (Bank of Russia)

Press Service

12 Neglinnaya Street, Moscow, 107016 Russia;

Revocation of banking licence from Aksonbank and appointment of provisional administration

By Order No. OD-2423, dated 17 September 2018, the Bank of Russia revoked the banking licence of the Kostroma-based credit institution Limited Liability Company Commercial Bank Aksonbank, or CB Aksonbank LLC (Registration No. 680) from 17 September 2018. According to its financial statements, as of 1 September 2018, the credit institution ranked 285th by assets in the Russian banking system.

The business model of CB Aksonbank LLC was that of a captive bank, with its key business line being financing of retail and wholesale organisations associated with the bank owner’s business. Currently, outstanding loans to these companies make roughly 80% of the corporate loan portfolio of CB Aksonbank LLC; given the nature of economic relations with the credit institution, this resulted in a considerable share of dubious assets on the bank’s balance sheet. The only source of funding for these placements of the credit institution was funds attracted from households. The due diligence check of credit risk at the regulator’s request established a substantial loss of capital and entailed the need for action to prevent the credit institution’s insolvency (bankruptcy). In these circumstances, the bank’s owner stayed away from solving the financial organisation’s problems and declared no intention to take measures to bring its operations back to normal. The said circumstances pointed to a real threat to creditors’ and depositors’ interests from the operations of CB Aksonbank LLC.

The Bank of Russia had repeatedly (7 times over the last 12 months) applied supervisory measures against CB Aksonbank LLC including two impositions of restrictions and one ban on household deposit taking.

Under these circumstances, the Bank of Russia took the decision to revoke the banking licence of CB Aksonbank LLC.

The Bank of Russia takes this extreme measure — revocation of the banking licence — because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ and depositors’ interests.

By its Order No. OD-2424, dated 17 September 2018, the Bank of Russia appointed a provisional administration to CB Aksonbank LLC for the period until the appointment of a receiver pursuant to the Federal Law ‘On Insolvency (Bankruptcy)’ or a liquidator under Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.

CB Aksonbank LLC is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’ in respect of the bank’s retail deposit obligations, as defined by law. The said Federal Law provides for the payment of indemnities to the bank’s depositors, including individual entrepreneurs, in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor.

17 September 2018

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