PJSC Tatfondbank said Dec. 13 that it will suspend cash and settlement services from Dec. 14 to Dec. 17 to develop and implement measures to restore its liquidity.
The bank also said separately that it did not redeem its BO-14 series bond amounting to 1.8 billion Russian rubles and did not pay a 4.1 million ruble coupon on the bond because of a temporary lack of funds.
The lender noted that its management board had been involved in consultations with the authorities of Russia's Tatarstan Republic, which is its main shareholder, and that the plan to restore its financial stability was sent to the Russian central bank.
Kommersant reported Dec. 14 that the board of directors of Tatfondbank did not approve a financial rehabilitation scenario under which Tatarstan's majority holding in the lender would drop to 25% because the local government wants to maintain control over the bank at all costs and is ready to recapitalize the lender.
Rescuing the bank with the involvement of its current shareholders is just one of the scenarios being considered, with the other two involving the lender's merger with PAO AK Bars Bank and a financial recovery with the participation of an external investor with ties to the local authorities, RBK Daily said Dec. 14, adding that the lender was set to present the three scenarios to the central bank Dec. 14. AK Bars Bank earlier denied merger talks with the troubled lender.
Moody's on Dec. 14 downgraded Tatfondbank's long-term foreign- and local-currency deposit and debt ratings to Caa1 from B3, its baseline and adjusted baseline credit assessments to "caa3" from "caa1" and its counterparty risk assessment to B3(cr) from B2(cr). It also placed the ratings on review for downgrade.
The agency cited the suspension of client servicing and payments, and said the review for downgrade would be resolved when it receives information on a support package and the bank's solvency status. A downgrade could follow if the support provided is insufficient to restore the bank's liquidity and solvency "to a sustainable level," Moody's noted.
As of Dec. 13, US$1 was equivalent to 60.70 Russian rubles.