07 August 2016, 21:01 / Finance

Constance Bank lost its license

Almost all of the bank’s assets were in the cash register Zaitseva Nadezhda Evgeniy Fedorov

Two days before the license was revoked, the bank’s operations were limited / L. Vereshchagina / for Vedomosti

On August 5, the Bank of Russia revoked the license of JSC JSCB Constance Bank and appointed a temporary administration. The regulator revealed a large shortage of cash in the bank’s cash desk, the press service of the Central Bank reports. “As a result of the formation of reserves for possible losses against actually missing assets, the credit institution completely lost its own funds (capital). In addition, the bank was involved in dubious transit transactions. The managers and owners of the credit institution did not take effective measures to normalize its activities,” the Central Bank said in a statement.

According to the regulator, the bank’s equity adequacy ratio is below 2%, and the amount of equity is below the minimum authorized capital value. On August 3, at the request of the Central Bank, restrictions on transactions were introduced in the bank. According to information on the website of the Bank of Russia, Constance Bank is 99.07% owned by Modern Drilling Technologies LLC, 40% of this company is owned by Alexander Ebralidze and Anatoly Popov, another 20% is owned by Elvira Dygova (mother of the chairman of the board of Constance Bank of Eldar Dygov). Ebralidze directly owns 0.93% of the bank's shares.

Constance Bank was founded in 1993, it has more than 40 branches in St. Petersburg and the Leningrad region, according to its website. The Bank is a participant in the deposit insurance system. According to Interfax-CEA, as of July 1, the bank’s assets amounted to 3.8 billion rubles. (356th place), deposits of individuals - 2.7 billion rubles.

The message about the revocation of the license contains a rare wording about the identification of a large shortage of cash in the bank’s cash desk, notes the head of the analytical department of the BKF bank, Maxim Osadchiy. “As of July 1, the bank had 3.2 billion rubles in its cash register. Such a high concentration of assets in the cash register is rare, it is no wonder that when the Central Bank employees arrived at the bank, the cash register happily evaporated,” comments Osadchiy. He says that the source of cash, judging by the reporting, was public deposits. Osadchy calls Constance Bank a “vacuum cleaner” - deposits accounted for 74.3% of the bank’s liabilities.

The bank did not have a significant portfolio in either corporate or retail lending; its main income came from foreign exchange transactions, but recently the demand for them has fallen, says one of the St. Petersburg bankers. Perhaps the bank’s condition is due to the deterioration of the main business of the controlling owner, Ebralidze, he suggests. The bank's branches are not located in the most attractive places, according to Vedomosti's interlocutor.

Ebralidze’s largest asset is the luxury Talion hotel with 120 rooms at 15 Nevsky Prospekt. The Talion company invested $40 million in the reconstruction of the complex of buildings at 15 Nevsky Prospekt, 59 Moika embankment, and 14 Bolshaya Morskaya Street (reconstruction continued from 1993 to 2010). Several years ago, the entire complex was put up for sale - first for 12 billion rubles, then the price was reduced to 9.5 billion rubles, but there were no buyers. The hotel is still owned by Ebralidze, and some of the premises have been sold, says one of the participants in the real estate market.

Constance Bank and Talion refused to comment on the situation.