Central Bank of Russia revokes banking license of Energomashbank

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AK&M 11 June 2021 16:17

The Bank of Russia has revoked the banking license of Saint Petersburg-based Bank For Electric Power Industry, Public Limited Company (Energomashbank, Plc). The credit institution ranked 145th in the Russian banking system in terms of asset size.

Energomashbank fully lost its capital, implemented a highly risky business model understating the value of required loan loss provisions to be formed, violated federal banking laws as well as Bank of Russia regulations and orders, due to which the regulator repeatedly applied measures against it over the past 12 months including two cases of restrictions on household deposit-taking, the Central Bank notes.

Due to substantial credit risks and low quality of the bank's assets, the execution of the Bank of Russia's demands to create additional provisions led to a complete loss the capital of Energomashbank.

In addition, Energomashbank lost its ability to perform timely its obligations to lenders due to a loss of liquidity.

The Bank of Russia appointed a provisional administration to Energomashbank. The powers of the credit institution's executive bodies were suspended. Energomashbank is a participant in the deposit insurance system.