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Russian central bank starts closure of lender Yugra

Russian central bank starts closure of lender Yugra

MOSCOW: Russia’s central bank has begun to wind up Yugra, the country’s 33rd largest lender by assets, in what is set to be one of the country’s largest banking collapses in recent years. The central bank said in a statement on Monday that it had placed Yugra under temporary administration for six months, which effectively amounts to the bank’s closure. Banks under temporary administration are either absorbed by larger banks under the regulator’s “financial rehabilitation programme” or – in the case of over 300 banks since 2013 – shut down after the exposure of massive balance sheet holes. “The primary task of the temporary administration [period] is to investigate the bank’s financial situation,” the central bank said, describing it as “unstable.”

Depositors are eligible for insurance payments of up to Rbs1.4m ($20,000) starting in two weeks, the central bank said. Yugra’s deposits total Rbs181.3bn, which would make the possible payouts the largest in Russia’s history. Signs of Yugra’s problems had emerged over the previous few months. In May, the central bank ordered it to form Rbs40bn in reserves, according to Russian newspaper Vedomosti. The bank’s systems had begun to malfunction a month earlier. “The situation isn’t clear at the moment, because the bank fulfilled all the central bank’s norms and had full liquidity. So it’s all news for us too, as well as for the whole market, in likelihood,” Alexei Neferov, Yugra’s chief executive, told the news site RNS.