Otkritie Bank and B&N Bank, the financial recovery of which is overseen by the Russian central bank, wrote off their subordinated liabilities totaling 265.8 billion Russian rubles, Vedomosti reported Dec. 3.

B&N Bank's shareholders decided to use undistributed profit of 17.6 billion rubles and share premium of 25.3 billion rubles to cover the bank's losses, the lender said Dec. 1, noting that the decisions were necessary to write off its subordinated liabilities.

The bank owed $226.6 million in subordinated debt to shareholders and 17.8 billion to the Russian Deposit Insurance Agency, Vedomosti said. The lender reportedly confirmed that all subordinated liabilities to shareholders were written off, the newspaper noted.

Otkritie Bank wrote off subordinated debt amounting to $1.5 billion and 72 billion rubles, and also reduced its authorized capital to 1 ruble, the news report said.

Before Otkritie's subordinated debt was written off, the bank paid back 6.9 billion rubles in subordinated loans to state-owned Vnesheconombank, the newspaper also noted. The loans were granted during the financial crisis of 2008 and 2009 to Nomos-Bank and Khanty-Mansiysk Bank, which later merged into Otkritie. Due in 2019, the loans were repaid ahead of schedule, and VEB transferred the funds in November to the Russian National Wealth Fund, which provided resources for the loans, Vedomosti said.

As of Dec. 1, US$1 was equivalent to 58.55 Russian rubles.