The Central Bank will receive 75 percent of Otkritie Bank

The Central Bank will receive at least 75 percent of Otkritie Bank, said Dmitry Tulin, First Deputy Chairman of the Bank of Russia.

The current owners of Otkritie, according to Tulin, will retain no more than 25 percent of the bank, and only if the interim administration introduced by the Central Bank does not find a "hole" in the capital of this credit institution.

Tulin, according to Finmarket , also said that the owners of Otkritie themselves turned to the Central Bank with a request to conduct a financial rehabilitation of the bank using the Banking Sector Consolidation Fund. The bank's capital, added the first deputy chairman of the Central Bank, was insufficient in comparison with the amount of risk it took.

The recovery of the bank with the use of the Banking Sector Consolidation Fund, explained in the Central Bank, assumes that during the period of the temporary administration, introduced for a period of 6 months, the rights of the shareholders of the credit institution are suspended.

After the completion of the interim administration, the rights of shareholders are restored, but the share of ordinary shares of the bank that they continue to own cannot exceed 25 percent.

At the same time, during the period of work of the provisional administration, the authorized capital of the bank is brought into line with the amount of own funds, and if the capital turns out to be negative, it is reduced to 1 ruble. In this case, the current shareholders completely lose their ownership rights to the bank.

The decision to reduce the authorized capital of Otkritie will be made by the Banking Supervision Committee and formalized by order of the Central Bank. To implement this decision, the provisional administration will amend the bank's charter and place shares, the nominal value of which must correspond to the new size of the authorized capital. The additional issue of shares will be bought out by the Bank of Russia, which will thus receive at least 75 percent of the bank.

At the final stage of the bank's reorganization under this scheme, a decision will be made to form new management bodies of the credit institution, after which the work of the temporary administration will be completed.

• The Central Bank announced the beginning of the reorganization of Otkritie Bank on August 29. A temporary administration has been introduced in the bank. The financial rehabilitation of Otkritie will be carried out by the Banking Sector Consolidation Fund. Otkritie will be the first bank to be sanitized through this fund, created by the Central Bank in May. The Bank, as announced by the Central Bank, will continue to work as usual.
• At the end of May 2017, S&P downgraded Otkritie Bank by one notch, from BB- to B+. After that, the outflow of funds began from the bank. According to Mikhail Kovrigin, Director of the Department for Supervision of Systemically Important Credit Institutions of the Central Bank of the Russian Federation, from July 3 to August 24, legal entities withdrew 389 billion rubles from Otkritie, and individuals - 138 billion rubles.
• Before the massive outflow of funds from Otkritie, the bank was the largest private credit institution in the Russian Federation in terms of assets.
• The Otkritie group, together with the bank of the same name, includes Rocketbank, Tochka Bank and a number of other organizations.