Billionaire Gutseriev will solve his problems with the bankrupt B&N Bank for 140 billion rubles

Billionaire Mikhail Gutseriev is discussing with Trust Bank, controlled by the Central Bank, an agreement to settle the debts of Gutseriev and his nephew Mikail Shishkhanov for 140 billion rubles to their former banks - Binbank and Rost Bank, writes Reuters. The deal will be profitable for Gutseriev - the Central Bank estimated the debts of his structures to banks at 320 billion rubles. After signing the agreement, the Central Bank will not be able to hold the businessman to subsidiary liability.

Details. Trust discussed the agreement with Gutseriev at the last meeting of the bank's supervisory board at the end of September, but they did not reach an agreed decision, writes Reuters. Now the final decision remains with the Central Bank and Otkritie Bank, which own 98% and 2% of Trust shares, respectively. The decision must be made by October 30.

• The agreement will be governed by English law. Debts will be repaid in both cash and assets in installments over five years.
• The document, according to Reuters, will be signed by Mikhail Gutseriev and his brother Sait-Salam Gutseriev. Their nephew Mikail Shishkhanov, who managed the family’s banking assets but was removed by Gutseriev on the eve of the bank reorganization, will not take part.
• “This is a good deal for Gutseriev,” says a Reuters source close to the businessman: after signing the agreement, the businessman will not be held liable for subsidiary liability. Trust estimated the debt of structures directly connected with Gutseriev at 320 billion rubles, one of the agency’s sources knows.
• After the announcement of the reorganization of Binbank and Rost Bank at the end of 2017, Gutseriev and Shishkhanov promised to compensate the Central Bank for losses from the reorganization by transferring their assets. To do this, businessmen transferred shares of the companies Inteko and A101 to the banks, as well as 25% of preferred shares in the oil company Russneft. According to the deputy chairman of the Central Bank Vasily Pozdyshev, Gutseriev and Shishkhanov estimated the surrendered assets at 440 billion rubles, the Central Bank - at only 100 billion.

Context. The Central Bank announced the reorganization of B&N Bank in October 2017, having previously estimated the hole in its capital at 250–350 billion rubles two years ago. The financial recovery procedure, like that of all large banks in 2017, began then according to a new scheme - through the Banking Sector Consolidation Fund, which assumes that the Bank of Russia becomes the owner of at least 75% of the credit institution. Rost Bank, which B&N Bank had previously taken over for reorganization, also came under the control of the Central Bank.

• After the reorganization of B&N Bank and Rost Bank in 2017, B&N Bank required additional capitalization of 57 billion rubles, and the regulator allocated almost 800 billion rubles for the expansion of operations between B&N Bank and Rost Bank.
• The problematic assets of large banks that fell under reorganization in the amount of 2.4 trillion rubles were then collected on the balance sheet of Trust Bank, which became a kind of base for bad debts. It was assumed that the regulator would return up to 40–60% of this amount by collecting losses from the owners of banks taken for reorganization.

To learn more. We wrote more about how the owners of B&N Bank tried to save it before the reorganization here .