The Bank of Russia took a decision to revoke effective June 15, 2012 a banking license held by United Development Bank (Moscow). The Central Bank of Russia posted relevant information on its web site on Friday.

As the regulator’s PR department reported, the decision to apply the measure of last resort, i.e. to revoke a banking license, was taken as the lending institutions failed to comply with the federal laws that regulate banking activities and CBR’s statutory acts, as the bank submitted misstated financial data and due to the lender’s failure to meet monetary claims of creditors, and also taking into account numerous applications during the year of the measures that are stipulated in the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”.

The bank “failed to ensure that obligations to the creditors are fulfilled on time, formed no reserves adequate to the risks accepted for possible loan losses and did not comply with the manner to record operations conducted in accounting records and financial statements,“ the Bank of Russia noted in a press release. “Meanwhile, the lending institution did not execute requirements of the supervisory body’s orders, including those relating to the reliable reflection of the bank’s real financial standing in financial statements. In this connection the lending institution provided the Bank of Russia with substantially misstated financial reports that concealed reasons for the bank’s license to be revoked and signs of bankruptcy,” the regulator said.

In accordance with CBR’s order, a temporary administration commenced work at the bank until a bankruptcy receiver or a liquidator is appointed. In accordance with the federal laws the powers and authority of the lending institution’s executive bodies were suspended.

United Development Bank was established in 2000. Since July 2006 the lending institution’s sole participant has been Westland Holding ApS (Denmark, the beneficial owner is the bank’s management board chairman Vladimir Sotskov).

The bank is not member of the national deposit insurance system.

As data show, as of May 1, 2012 the lending institution’s net assets totaled Rub 2.05 bln (No. 550 in Russia), capital (calculated in line with CBR requirements) equaled Rub 450 mln and the credit portfolio totaled Rub 1.46 bln.