Photo: RIA Novosti

The Bank of Russia has decided to rehabilitate Sovetsky Bank, headquartered in St. Petersburg. During the inspection, the regulator identified a hole in capital almost half as large as the volume of deposits, which as of October 1 exceeded 20 billion rubles.

It is more profitable to sanitize

The fact that the Central Bank on Tuesday, October 27, decided to sanitize Sovetsky Bank (133rd place by assets), RBC was told by a source close to the bank and a source close to the Central Bank. Earlier on Friday, October 23, the Central Bank introduced a temporary administration of the DIA into the bank. The audit revealed that the bank’s negative capital turned out to be almost half the volume of deposits (21.4 billion rubles as of October 1) - just over 10 billion rubles, so the regulator decided that it was more profitable to sanitize the bank rather than revoke its license, the source says , close to the bank. The Central Bank will announce a competition for reorganization within ten days.

Sovetsky is controlled by a group of individuals, 34.8% of the shares belong to Vladimir Mitrushin and his relative Alexander Teplyakov, another 24.2% belongs to the chairman of the bank’s board Andrei Karpov. Mitrushin also has development projects; real estate is listed on the bank’s balance sheet, says a source close to the bank. This information was confirmed by an interlocutor familiar with the bank’s reporting. The most valuable thing is four business centers in St. Petersburg, says one of the sources. One of the business centers is located on Bolshoy Sampsonievsky Prospekt. It houses the bank's head office as well as a UK visa centre. The bank has ten branches in St. Petersburg, nine in Moscow, and also has offices in the regions.

The bank's owners also control an insurance company of the same name - IC Sovetskaya.

Capital problems

At the end of August, the RAEX rating agency confirmed the credit rating of Sovetsky Bank at level B (low level of creditworthiness) with a negative outlook and withdrew the rating. “The bank asked to transfer the rating to non-public status, that is, it actually abandoned it,” says RAEX analyst Alexander Saraev.

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This year, Sovetsky Bank began having problems with capital. “We noted the bank’s low level of capital adequacy; its N1.0 standard was at the limit for a long time, just above 10%,” explains Saraev. According to him, most of the loan portfolio consisted of loans to the population, mainly car loans, overdue payments in the retail portfolio began to rise sharply this year, and the bank was forced to create significant reserves, which put pressure on capital.

The help of shareholders consisted in the fact that they transferred real estate to the balance sheet, Saraev notes. These were mainly land and warehouse facilities, but there was also a business center in St. Petersburg. According to a source close to the Central Bank, the value of real estate turned out to be overpriced, and since April 2015 it has depreciated due to the crisis. “At the end of summer, the share of real estate on the bank’s balance sheet was about 30% of assets, or 170% of capital,” says Saraev. The bank's total assets according to reporting as of October 1 amounted to 34.6 billion rubles. In July, the Central Bank conducted an inspection of the bank and demanded that reserves be supplemented.

In the summer, the bank significantly (by 20%) increased loans to companies; now the corporate loan portfolio is 10 billion rubles.

The Central Bank does not comment on the work of existing banks; a representative of Sovetsky Bank did not respond to RBC’s request.

Power will change in Sovetskoye