The Bank of Russia has revoked as of January 15, 2016 a banking license held by Ergobank (Registration No. 2856), the regulator's press service reported.
The Bank of Russia pointed out that the decision to apply the measure of last resort was taken due to the lending institution's failure to comply with the federal laws regulating banking activities and also CBR's statutory acts, because all its capital adequacy ratios fell below 2% and its equity declined below the minimum threshold set by CBR on the date of the lending institutions' state registration and taking into consideration the multiple application of the measures specified in the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)".
"With poor quality assets Ergobank inadequately assessed accepted credit risks. The proper assessment of the credit risk at the request of the supervisory body showed complete loss of the bank's equity. Furthermore, due to the loss of liquidity Ergobank failed to timely fulfill its obligations to creditors or deposit holders," the regulator noted in a press release.
Ergobank bank is a member of the national deposit insurance system.
On January 12, 2016 RBC wired quoting sources that the Russian Orthodox Church entered negotiations over the purchase of a controlling interest in Ergobank. RBC sources said that the church became interested in buying the bank in order to save funds held on its accounts at the lending institution. However, later the Russian Orthodox Church denied these reports.
News broke back in late December 2015 that Ergobank encountered liquidity problems. On December 28, 2015 Ergobank deputy management board chairman Alexei Glinyaniy told Banki.ru that the financial institution decided to suspend the opening of deposit accounts. He said that liquidity problems are of seasonal nature.
Ergobank's board of directors previously reviewed the lending institution's rehabilitation plan that was based on the search of new investors. The second scenario stipulated the bank's rehabilitation with the help of another bank.Meanwhile, Ergobank assured that all deposit holders whose accounts are close to expire would get their funds in January 2016.