The Russian central bank wants to merge Otkritie Financial Corp. Bank and B&N Bank, controlled by the regulator's banking sector consolidation fund after their 2017 bailout, news agency RBK reported Feb. 2, citing the central bank's head Elvira Nabiullina.
She reportedly said the regulator took an "internal decision" to merge the two banks, possibly without some of their bad assets. Nabiullina added that the regulator has been considering setting up a separate bank for distressed assets, according to the report.
The central bank is concerned about a fairly large share of state ownership in the banking sector and intends to sell Otkritie and B&N Bank to investors as quickly as possible when the banks are ready, Nabiullina reportedly added.
The Russian regulator has been actively cleaning up the local banking sector since mid-2013, and the central bank's head said most of the cleanup process has now been completed, Reuters reported the same day.
There are still over 500 banks operating in Russia, and the regulator has been gradually introducing tighter rules for the sector, including with regard to lending to affiliated parties, often considered one of the reasons behind bank failures, the newswire noted.
Since 2017, local banks also need to have a strong rating from local agencies to access state funds — a requirement that will soon replace other existing criteria in this area, such as minimum sizes for capital and balance sheets, Nabiullina was cited as saying. She reportedly also noted that the regulator has been in discussions with local lenders about introducing higher provisions for loans provided to companies to finance M&A activities rather than regular business operations.
Meanwhile, the central bank said separately on its website that it revoked banking licenses of small Moscow-based lenders Raschetno-Kreditny Bank and PartnerCapitalBank, pointing to their risky business model and involvement in dubious operations.
