Black list of Russian banks

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Over the past six months, the Russian banking community has been in a fever: one of the main topics for discussion has been blacklisted banks. What is this list and what threatens the organization with getting into lists of this kind?

The first black list of banks appeared almost 10 years ago, namely in the summer of 2004. Then the Central Bank carried out one of its first global campaigns to “clean up” domestic banking from unscrupulous players. Online blacklists have fueled mutual distrust in the interbank lending market, resulting in a loss of liquidity by several small and medium-sized banks. As a result, several organizations lost their licenses, but the regulator managed to keep the situation under control and prevent an avalanche of bankruptcies.

Fantasy

In mid-November 2013, the first wave of rumors and insinuations about sustainability took placesome lending institutions. The head of the Central Bank, Elvira Nabiullina, denied such information in all interviews and, tirelessly, repeated that the regulator does not compile any stop lists. The Association of Russian Banks adhered to the same position, refusing to acknowledge the existence of black lists.

licenses.

Winter 2014: time to lose cans

The explanatory work carried out gave certain results, but most Russians started every morning with a search for information about which banks were blacklisted for the current date. Despite the current deposit insurance system, some depositors chose to withdraw their savings from potentially problematic institutions. The heads of firms that have settlement accounts in banks included in the replicated lists also preferred to withdraw funds from them.

Soon, many bankers, remembering the well-known saying that money loves silence, stopped commenting on the topic of blacklists altogether. If journalists were able to get information on this issue, it was very stingy and controversial.

The general rhetoric of experts was reducedto the classic expression: "Wait and see." In particular, the press secretary of SMP-Bank, Igor Ilyukhin, in an interview with the Bankir.ru portal, said that he personally has 3 black lists, which include, among other things, an organization with license No. 1481, that is, Sberbank Russia".

A little about the veracity of the information

It should be noted that some blacklisted banks actually lost their license afterwards. One such list containing 48 organizations was made public on December 4, 2013. From that moment until the end of the first quarter of 2014, licenses were revoked from 12 banks that were on the list. Among the "untimely deceased":

• December 2013 – Project Finance Bank, Investbank, MAST-bank, Smolensky, Askold.
• January 2014 - "My Bank".
• February 2014 – Link-Bank, Eurotrust.
• March 2014 - Russian Land Bank, Monolith, Sovinkom, EnergoBusiness.

Thus, information about the poor financial situation and the possibility of revoking a license for a quarter of credit institutions from the black list was confirmed in just four months. It is possible that the aforementioned black list of Russian banks was compiled on the basis of insider information available to its authors. It is possible that it was the resultconducting a thorough analysis of the main performance indicators of fifty domestic credit institutions. In this case, one can only admire the amount of work done and the validity of the conclusions drawn.

Organization of supervision over the activities of banks…

The Central Bank (within the framework of federal law No. 86-FZ) supervises banks, their financial and credit policies, and also monitors dubious operations of the organization and its clients. In accordance with the requirements of the regulator, all banks send reports on transactions to the Central Bank, and they do it on time and on an ongoing basis.

The Central Bank regularly checks all credit institutions. Moreover, a comprehensive audit of any bank is carried out at least once every 3 years. In the course of this audit, the size and structure of the assets and liabilities of the credit institution, special coefficients characterizing its stability are carefully analyzed. In addition to comprehensive, there are also thematic checks, which sometimes happen several times a year.

In addition to the supervision of the "Central Bank", "Rosfinmonitoring" - in the framework of fulfilling the requirements of the law 115-FZ - daily receives from banks tens of thousands of messages about their transactions, which may be of a dubious nature. It is not entirely clear for what purpose all these piles of information are collected, if it does not further contribute to the adoption of adequate measures against credit institutions that violate the requirements of the law.

…and its results

There isthe opinion that the banks that are on the black list, for a number of reasons, are under special control of the Central Bank. Indeed, the real financial position of each particular bank is quite transparent and understandable for the regulator's specialists. At the same time, it is impossible to change it in any significant way in a short time. It is quite possible that, based on the information received, the Central Bank may well draw up its own black list of banks, which usually includes organizations that need to strengthen supervision over their activities.

The Central Bank has a whole range of tools that help improve the performance of a credit institution and prevent its bankruptcy, and revoking a banking license is the most extreme measure. Therefore, each such case is a defect of the specialists of the territorial departments of the Central Bank.

As a result, the main reasons that led to the revocation of licenses from most banks, the Central Bank calls the provision of false reporting, the conduct of a high-risk credit policy, as well as their failure to comply with regulations governing their activities.

Predictable actions of unpredictable depositors

It should be noted that the widely publicized black list of banks (2014) contributed to the strengthening of unfair competition. In particular, employees of some leading credit institutions urged their clients to transfer funds from banks allegedly on the lists for license revocation.

The regulator's unwillingness to answer the question of how to find out the black list of banks, as well as the lack of reliable information about the real situation of credit institutions included in it, led to a massive transfer of citizens' deposits to banks with state participation. In the fourth quarter of 2013 alone, the volume of citizens' deposits in Sberbank increased by 7.8%, in VTB Bank - by 4.7%.

Significance criteria

Whether any particular banks were on the black list of the Central Bank, or it was another inspired company to clear the market from competitors, is no longer so important. But the white list has already been officially announced.

At the end of 2013, the Central Bank developed the criteria according to which the so-called systemically important banks will be determined. It is proposed to consider the size of assets, activity in the interbank market (separately as a lender and as a borrower), as well as the volume of private deposits as the main criteria.

Based on these indicators, a calculated "generalizing result" is derived, the value of which shows the degree of significance of the bank for the Russian banking system. The annual list will include those credit institutions whose "summary result" exceeds 0.6.

"White" list

The main contenders for a place in the list of systemically important credit institutions will be state-owned banks: Sberbank, VTB, Rosselkhozbank, Gazprombank and others. The list may include such largest privatebanks such as Alfa-Bank, Promsvyazbank, NOMOS Bank, Bank of Moscow. Obviously, being on the "white" list makes it easier for a credit institution to access state resources, in particular, to receive loans from the Central Bank and participate in auctions for the right to host deposits of state companies and state corporations.

On the other hand, getting into such a list means increased attention of the regulator to the operations carried out by organizations. There is an opinion that some private banks will prefer to slightly reduce business activity in order to avoid too close attention of the Central Bank.

New requirements for the reliability of banks working with public funds

At the end of March this year, it became known that the Ministry of Finance and the Government of the Russian Federation intend to revise the list of banks in which state corporations will be allowed to place their funds in the future. According to the project developed by the Bank of Russia, state-owned companies will be able to place temporarily free money only in those organizations whose long-term rating will be at least BBB (according to Fitch or Standard &Poor's) or Baa3 (according to Moody's) in accordance with the terms of the placed deposits.

Russian bankers reacted to the innovation without much enthusiasm, seeing it as yet another company aiming to add credit institutions to the unofficial black list of banks, which for some reason do not have ratings from these agencies. The general opinion of the banking community was expressed in an interview with the Izvestia newspaper by a representative of FBK RomanKoenigsberg. According to him, the idea of placing state funds in reliable banks is generally sound and correct, but the use of international ratings as the main evaluation criterion is largely debatable.

Rating features

Long-term rating agencies that make up the "big three" has only 78 domestic banks. Moreover, international ratings are largely subjective, they take into account the foreign policy situation to a greater extent, and not the real state of affairs in a credit institution. Agencies - under pressure from certain Western structures - can withdraw their ratings at any time, which will entail significant difficulties for Russian banks participating in state programs.

The planned tightening of requirements for ratings of credit institutions should lead to a reduction in the number of participants in deposit auctions by approximately one and a half times. According to some expert estimates, about three dozen banks will eventually be admitted to such auctions. It is clear that organizations that have dropped out of the struggle for state resources will automatically draw up a new "Black List of Banks-2014".

What's next?

In the second quarter of 2014, according to experts' forecasts, the pace of "cleansing" the banking market will slow down somewhat, but work to identify problem organizations will continue. For example, on April 17, two more regional banks lost their licenses: the Dagestan "Kaspiy" and the Bashkir "AF Bank". It should be noted that these credit institutions were not included inthe black list of banks, as they occupied low lines in the ratings, and their main problems began only in 2014. According to some expert estimates, about fifty banks will lose their licenses during 2014.