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Reports: B&N Bank to write off subordinated debt to shareholders

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Reports: B&N Bank to write off subordinated debt to shareholders

B&N Bank will write off $226.56 million of subordinated obligations owed to its shareholders, including Mikail Shishkhanov and Mikhail Gutseriev, Vedomosti and Kommersant reported Oct. 4.

The write-off procedure was triggered after the lender's base capital adequacy ratio dropped below the level of 5.125% for six consecutive days between Sept. 19 and Sept. 24, the newspapers said, citing B&N and the Russian central bank, which recently moved to rescue the lender.

Unlike Otkritie Financial Corp. Bank, whose subordinated debt will also be written off following its recent bailout, B&N Bank does not have publicly traded subordinated bonds, Kommersant noted.

However, the bank has an 8.8 billion Russian ruble subordinated loan, as well as an 8 billion ruble loan it took on after its merger with MDM Bank. The two loans were provided to the banks by the Russian Deposit Insurance Agency as part of Russia's 2015 bank recapitalization program, and could be written off if B&N Bank's capital adequacy falls below 2%, Vedomosti noted.

As of Oct. 4, US$1 was equivalent to 57.57 Russian rubles.