2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The problems of Binbank began in the spring of 2017. The bank asked the state regulator for reorganization, as it was unable to continue its financial activities in the territory of the Russian Federation. In the media, information about the unstable position of the creditor "leaked" in August 2017. Since then, there have been rumors about a possible revocation of the license of Binbank. What happened to the well-known brand, and what are the forecasts of financial specialists about it now?
Ratings of Binbank
In 2017, the crisis had an impact on the company's positions. Being on the verge of revoking the license, Binbank lost a significant part of its assets, which affected the rating of the creditor.
In 2018, S&P Global Ratings improved the institution's record of unsecured debt. The "B" rating previously assigned by the agency has been changed to "B+". S&P Global Ratingscommented on the decision that the situation with Binbank is gradually stabilizing, which affected the nature of forecasting activities.
But S&P Global Ratings negatively assesses the position of "Binbank" in business and refers it to the risk group. Nevertheless, the agency notes the possibility of financing the lender by the state regulator, which reduces the risks for depositors and investors.
In December 2018, Binbank ranked 16th in the asset rating (according to banki.ru). In a month, he lost almost 2% of his assets.
But the most important thing, according to Binbank employees, is the client rating on banki.ru. According to the results of 2018, he took 1st place among reviews of Russian financial institutions. Focus on clients and high service allowed the well-known bank to "not fall" in the eyes of depositors in the midst of the company's financial crisis.
Problems of the banking sector and their impact on Binbank
Rehabilitation of 2017 became a salvation for Binbank from possible bankruptcy. Since 2013, a massive "cleansing" in the financial sector has begun in Russia. Financially unstable commercial banks have ceased to pass the regulator's checks, as it was before. This led to a massive outflow of customer deposits to government-owned entities.
Commercial banks such as Binbank, Otkritie, Growth Bank began to experience significant difficulties. In 2015-2016 the situationonly got worse. Customers began to contact the branches of "Binbank" to withdraw cash from their accounts.
As soon as the assets were reduced to almost a minimum, the lender was forced to seek help. Like other similar institutions, he needed the participation of the Central Bank. In connection with the current situation in the country, the regulator had to immediately make a decision regarding the future of Binbank. It became obvious to the management that without the support of the Central Bank of the Russian Federation they would not be able to save the company.
What are the reasons for the failure of Binbank?
The irrational business model of "Binbank" only contributed to the deterioration of the position of the creditor. The institution actively financed business projects of the owners, investing in them most of its assets. Such a policy could well lead to the revocation of the license of Binbank.
The Central Bank of the Russian Federation noted in its letters to the company that the share of assets issued to owners as credit funds is more than 700 billion rubles. But the management of "Binbank" denied the information about such a level of involvement in high-risk assets. There were statements on behalf of the bank that the maximum amount of funds issued to subsidiary business projects does not exceed 20 billion rubles.
Consequences of the 2017 crisis for Binbank
Without the availability of assets with high liquidity, the outflow of own funds instantly leads the creditor to a crisis, which happened with Binbank. In addition to lending, part of the assets of Binbank was placed inconstruction and real estate are unstable sectors of Russian production.
Depositors trusted "Binbank", therefore, when withdrawing a huge share of assets, the lender as a whole managed to maintain its position in the Russian market. But unrest among customers began to intensify. In September 2017, the situation became critical.
At the same time, the volume of funds kept before the outflow in the accounts of individuals allowed Binbank to develop in the banking sector of the Russian Federation. In 2017, it amounted to 539 billion rubles. Another 18 billion rubles - funds from the budget. With such a margin of financial strength, the lender was among the top 15 Russian banks in 2017 in terms of assets.
But the rapid decline in assets provoked a wave of crisis in the bank. It dragged on until the end of the first quarter of 2018. The decisive factor in restoring customer confidence and financial strength was the return of funds issued to Rost Bank.
"Rost Bank". Sanitation
Departments of "Binbank" continued to consistently serve customers. However, this did not last long. After the media reported that the institution had applied for reorganization, depositors "raided" into the branches of Binbank to close their accounts. The massive outflow of capital, coupled with a number of internal problems, contributed to the deterioration of the situation.
In "Binbank" of Moscow, more and more customers began to ask questions about the future of the company. Managers assured citizens that there was no cause for concern. But before that, information appeared on the network that"Growth Bank" needed reorganization. Binbank assumed the obligations of a creditor of a "weak" bank, which in its position could not affect the company's assets.
According to analysts, the financial recovery of "Growth Bank", which began to experience difficulties in 2014, was an important reason why the economic situation of "Binbank" was recognized as critical. "Binbank" was appointed as an interbank lender in the process of reorganizing the company in 2014, and after 3 years it experienced difficulties with assets.
Settlements with Rost Bank
On February 1, 2018, Rost Bank was supposed to return more than 700 billion rubles to the creditor. In 2014, the Deposit Insurance Agency financed unstable financial institutions.
The large volume of interbank credit affected the position of Binbank. But the Central Bank helped both structures to restore their position in the economic market of the Russian Federation. In March 2018, Rost Bank fully repaid the loan provided by Binbank. The situation has been resolved.
The news about the liquidation of the debt of "Rosta Bank" was warmly received by the clients of "Binbank" in Moscow and other cities. As the company's managers wrote in the comments, with the influx of funds to repay the debt on the loan, depositors who hastened to withdraw cash from their accounts admitted that their decisions were hasty.
Development of the lender in 2018year
In January 2018, the company's income was negative: the capital "went into the red" by 36 billion rubles. But at the beginning of 2018, the probability of revoking the license of Binbank was 30-40% lower than in the summer of 2017, despite the negative profit figures. The reason for this was the approval of the reorganization of the Central Bank of the Russian Federation and the new policy of the company.
March 2018 was the key to the lender's recovery. In March 2018, the Central Bank allocated more than 56 billion rubles to Binbank. In the same month, Rost Bank paid off the debt in full. The reliability of "Binbank" and a good reputation have been partially restored. Investors again trusted the institution with their capital.
What do the problems of Binbank and Otkritie have in common?
Belonging to the group of significant creditors, Binbank did not hide its difficulties from the Central Bank and openly applied for reorganization in September 2017. A month earlier, the Central Bank helped another well-known participant in the financial market of the Russian Federation, FC Otkritie bank, to cope with the crisis.
Like Binbank, Otkritie experienced serious difficulties with assets. Scandals in the media only fueled rumors about a possible loss of a license. But the shares in the banking sector of Otkritie and Binbank are significant (3.2% and 2.3%, respectively, in 2017), and the brands are well-known. These reasons do not allow the regulator to refuse to rehabilitate creditors, as was the case with the Yugra bank. Yugra in 2017 occupied less than 1% of the market in Russia (0.4%), which became the reason for the lack of interest of the Central Bank of the Russian Federation in its stabilization.
The situation with banks from the top 15 is different: Otkritie and Binbank are popular with depositors. But after media reports in August 2017, individuals hurried to withdraw assets, as a result of which the financial "holes" of creditors only worsened. The Central Bank decided to support both companies by offering funds from the Banking Sector Consolidation Fund.
This is a modern version of economic recovery in the Russian market. Such measures can not only help strengthen the position of creditors, but also restore customers' faith in the reliability of Binbank and Otkritie. One of the options for the further development of companies was the merger of brands.
Combining "Opening" and "Binbank": reasons
After the reorganization of Otkritie and Binbank by the Central Bank, news appeared in the media about the creation of a new enlarged bank. It was formed after the merger of the two studied. This was the reason for the revocation of the license of Binbank on January 1, 2019.
There are several reasons why well-known brands merge:
- Increasing the level of assets through the absorption of one well-known brand - Binbank.
- Restore customer confidence in commercial lenders.
- Strengthening in ratings among Russian banks.
According to the new concept, the bank will be formed under the brand"FC Opening". The Binbank brand will lose its relevance. That is, it has practically ceased to exist. The addresses and telephone numbers of Binbank will remain the same until April 2019. After that, the details of the organization will also change.
Implications of the merger for bank customers
Regulator pins hopes on unification under the Otkritie brand. According to the official website of the new institution, branches of Binbank will continue to operate as before.
Clients who pay the loan in the first quarter of 2019 can transfer funds to old accounts. New details of Binbank will appear from April 2019. During the merger, the accounts of FC Otkritie will remain the same. Payers can find out the new details of the creditor on the official website of FC Otkritie.
Why did the change affect only the Binbank brand? Such information is not officially disclosed by the Central Bank. But experts suggest that the concept of "Discovery" is more modern and interesting for customers. Therefore, the details of Binbank are changing, as is the concept of branches and ATMs. The new brand will include the banking products of both companies. Despite the fact that the merger officially took place on January 1, 2019, the actual brands will be merged only after 2-3 months.
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