Bank of Russia cancels Bank Strategia and ABB licenses

The Bank of Russia has revoked effective July 21, 2016 banking licenses held by Moscow-based Bank Strategia (Registration No. 2801) and ABB (Registration No. 2937), the regulator's press service reported on Thursday.

The regulator specified that the decision to revoke the licenses of the lending institutions was adopted because they failed to comply with federal banking laws and also its statutory acts, and due to the application of the measures provided for in the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)".

Bank Strategia's capital adequacy ratios dropped beneath 2%, equity decreased below the minimum charter capital as specified on the date of the lending institution's state registration, the Bank of Russia reported. "Holding poor quality assets, Bank Strategia inadequately assessed accepted risks. The proper assessment of the credit risk, at the request of the supervisory body, showed full loss of the bank's equity (capital)," the regulator stressed in a press release.

While deciding to revoke ABB's license, the Bank of Russia took into consideration "a real threat to the interest of creditors". ABB pursued a high-risk credit policy and formed no provisions against loan losses and against other assets," the Bank of Russia said in the press release. The regulator pointed out that the bank's internal control regulations against legalization (laundering) of criminal income and the financing of terrorist acts did not meet requirements of the Bank of Russia's statutory acts. In addition, the lending institution was involved in suspicious transit operations.

Executives and owners of the banks took no efficient measures to normalize their activities, the regulator emphasized.

Bank Strategia is a member of the national deposit insurance system. The payment of compensation to the bank's deposit holders will begin no later than August 4, the DIA's PR department said.