Russia Mulls Additional Trillion Ruble Bailout For Failing Banks

In August 2017 we noted Russia's largest private lender was in trouble and required a bailout. Then a month later, a second bank hit the wall and was bailed out. And now, five months later, Russia's central bank is mulling a further capital injection of a trillion rubles to rescue Otkritie and B&N Banks.

In August, Otkritie Bank, which according to Interfax, "ranks 1st among privately-owned banks and 4th by assets among banking groups in Russia," was rescued by the central bank because "the bank is a systemically important credit organization, it occupies the 8th place in terms of assets. The Bank's infrastructure includes 22 branches and more than 400 internal structural subdivisions."

Interestingly, as the FT wrote at the start of 2017, "the breakneck expansion at Otkritie is raising fears that it is creating risks the state will eventually have to deal with.

“It’s not a business, it’s all relations,” a senior Russian investor says. “They want to become too big to fail.” Adds a senior Russian banker: "They are not a bank, they are a very risky hedge fund. Why should this be done with regulators’ [the central bank’s] money?"

The market did not love it...

Ironically, Otkritie's predecessor was the aptly named Shchit-bank:

 

And then, less than a month later, already nervous Russian depositors shifted their attention to another domestic lender, Russia’s B&N Bank, the country’s 12th biggest lender by assets, also sought a bailout from the central bank.

B&N Bank, which is controlled by Russian oligarch Mikhail Gutseriev and was not on the central bank’s list of systemically important lenders, said it had under-estimated the problems within the banks it had bought during an expansion drive. “Our objective is, with the support of the central bank ... to conduct an effective financial rehabilitation of the bank,” said Mikail Shishkhanov, who was named as chairman of B&N Bank, whose assets account for 2 percent of the Russian banking system, according to ratings agency Fitch.

We noted at the time, that perhaps, if the Russian central bank has unlimited funds to keep bailing out the Russian oligarch's pet banks which they used mostly to launder illicit funds, then sure. Then again, where there are two bank runs in under a month, more are guaranteed, and all that would take to cripple the Russian financial system is a panic at one of the larger domestic banks, rekindling memories of the near collapse Russia experienced in late 2014 when crashing oil prices and a plunging ruble, sent Russian rates as high as 20% and pushed the country to the verge of hyperinflation.

In other words, if the "deep state" really wants to hurt Russia, it knows what to do

And so our eyebrows raised when, after a week or two of almost constant attacks on Russia (and Putin's grandstanding address ahead of this weekend's election), it appears the bank runs have continued and now both these apparently "systemically important" banks may need more, much more...

As Reuters reports, Russia's central bank is considering pumping more than 1 trillion roubles ($17 billion) into two banks it first bailed out last year to shore up their balance sheets, three sources familiar with the discussion told Reuters.

The central bank bailed out private banks Otkritie, B&N Bank and Promsvyazbank in 2017 and shut dozens of smaller lenders as part of a broader clean-up of a sector weakened by mounting bad loans and deposit outflows.

By the end of 2017, the central bank had provided more than 1.5 trillion roubles to improve the liquidity and capital of the three banks. Some of that money has been reimbursed but Otkritie has already said it needs more.

The 1 trillion rouble capital injection now under discussion is for Otkritie's Trust and B&N's Rost subsidiaries and would come on top of the money already disbursed, a source close to one of the banks said.

Notably, the governor of Russia's central bank, Elvira Nabiullina, is a close ally of President Vladimir Putin, who is on track to be re-elected in an election on Sunday... who presumably would like to avoid banking crisis headlines the day before the vote.

Comments

Slack Jack skbull44 Fri, 03/16/2018 - 14:14 Permalink

Secretary-General Jens Stoltenberg said: "This is the first offensive use of a nerve agent on alliance territory since NATO's foundation..."

Yeah right,... Stoltenberg is a total MORON.

Notice that the toxic substance is always "a nerve agent".

I guess that is because they don't actually know what it is. Why not name it? [Probably, they don't name it because they know this is a false flag and they don't want to be pinned down over details.]

And if they don't actually know what it is, then they don't know who manufactured it, or where.

They also discount the possibility of a false flag (and given that we have seen false flag, after false flag, after false flag, for more than twenty years now, doing so is incredibly stupid (or deliberate)).

May & Stoltenberg etc are total MORONS, or worse.

And: "The substance used is one of the most toxic ever developed."

Yeah right,... But no one died from the event.

If it had been as toxic as the nerve gases, Sarin, Tabun, etc,... then everyone who came into contact with it would have died.

I see that the "nerve agent" suddenly has a name. It is a Novichok nerve agent.

Supposedly some Novichok variants are five to eight times more potent than VX,.... but no one effected by the substance died.

This is a big problem for the false-flag people. No one died. If it had been just a few tiny drops of your standard nerve gases, like Sarin, or VX, people would have died.

The Brits, or Yanks, and others know the chemical formula, because Mirzayanov told them, so with a bit of effort they could synthesize the substance themselves.

Mind you they didn't even have to bother doing this because they could just ask Mirzayanov how to make the stuff.

Since the Russians charged Mirzayanov with treason and he now lives in exile in the U.S. he would find it hard to say no.

The British poisonings are most likely a false flag operation.

In reply to by skbull44

T.Gracchus IH8OBAMA Fri, 03/16/2018 - 16:32 Permalink

Anyone who reads your pointless contributions to debate will already be aware that you are a mouth-breathing, inbred moron. Your lack of even basic historical knowledge simply proves the point beyond all doubt.

Russian Tsarist two headed eagle looks west to white European Russia and East to Asiatic Russia, same with Imperial Habsburg eagle who looked west to Austria/Germany and east to Galicia, Ruthenia.

Since you wear your ignorance like a cheap coat, please realise that nobody here respects your contributions, and maybe best to just stop them. 

In reply to by IH8OBAMA

Giant Meteor T.Gracchus Fri, 03/16/2018 - 17:12 Permalink

On the other hand Tiberious (the younger I am assuming), I would like to thank you for your thoughtful and learned contribution to this errant conversation, and also giving historical relevance to the flippant two headed question above. Well done.

But remember, in your own good words tribune,

"It is the duty of a good shepherd to shear his sheep, not to skin them." - T. Gracchus

In reply to by T.Gracchus

veritas semper… T.Gracchus Fri, 03/16/2018 - 19:02 Permalink

Russia's huge land mass contributes to this. Russia is the world's great BALACER. Between East and West.

Janus ,the God of beginnings,time ,duality presided over the beginning and ending of conflict, and hence war and peace.

Russia's double headed eagle is inherited from the Byzantine Empire,as Russia is the true third Rome ,the Christine Orthodox .It was also a symbol on the Russian Czar's coat of arms ,the Romanov house.

I continue to be amazed by the stupidity and ignorance of most Americans. Like the one you responded to.

In reply to by T.Gracchus

TeraByte Justin Case Fri, 03/16/2018 - 23:42 Permalink

This anti-Putinism becomes back to a simple land grabbing issue, Russia´s huge land mass and control over its vast resources. Why would e.g. resource starved Europe have to pay Russia for the gas, if it could ally and see Russians turned into serfs with nothing to say over their resources? 1996 the corrupt Yeltsin was force re-elected by foreign money (US), but thereafter Putin stood in between foreign and Russia´s national interests. Western sheeples do not get that, but revere a faltering US world dominance agendum. God All Mighty did not choose US to reign all the other nations and the Universe was not created for the completion of the fate of the Jewish people either.

In reply to by Justin Case

Son of Captain Nemo Giant Meteor Fri, 03/16/2018 - 15:33 Permalink

"Yeah, everybody's got troubles .."

But doesn't Washington wish they had the oil, gas, uranium gold, silver and palladium that Russia HAS in order to keep the "huts" warm (https://www.rt.com/business/420464-russia-lng-tanker-britain/) and the "lights on" at their price vs. the shale price?... EVEN with all of those U.S. and British sanction(s) on them!!!

In reply to by Giant Meteor

Radical Marijuana Giant Meteor Fri, 03/16/2018 - 16:25 Permalink

A trillion rubles made out of nothing to keep Russian banks going is relatively trivial compared to the tens of trillions created out of nothing by each of China, USA, EU & Japan, etc., as increases in their own currencies (mostly worth much more per unit than a ruble.)

Everybody living inside the MAD Money As Debt systems have troubles built into the structure of that MADNESS. Within fundamentally fraudulent financial accounting systems, the only "solutions"  for their troubles are more frauds.

Pretty well everybody is living inside that MADNESS, while Russia has a relatively small share of the globalization of that MADNESS. Hence, for Russia to create a trillion rubles here, or a trillion rubles there, due to their particular case, is not so significant compared to how the whole world added up to doing so in the hundreds of trillions of units of their collective currencies.

(At least Russia still has enough natural resources left to somewhat justify making more "money" out of nothing to "pay" for continuing to strip-mine those natural resources. There are few other countries left anywhere else which are in similarly advantaged positions.)

In reply to by Giant Meteor

Giant Meteor Radical Marijuana Fri, 03/16/2018 - 18:07 Permalink

Good observations RM, and as always great to hear from you.

More frauds it shall be then, as daily more and more are revealed, for all to see. It shall be interesting to say the least, as to how all this plays out, as credit (debt) creation and the exponential function becomes more difficult to hide with either bright sided statistical rhetoric, or the evil doer talk we are treated to daily, tales from the crypt so to speak.

My take, there are no good guy's in any positions that matter, no white hats in any regard. Certainly little to no honest accounting of ANY system of importance. All systems strain under the weight of their fraud and hubris. Just as one example the present state of modern day journalism, totally bereft, bankrupt as a going concern. So of course, the same hat tricks are played out over and over, on every level. Sometimes with slight variations, but the same nonetheless. Scripted ..

And let us never forget, it is after all very much the oligarchs world, as mostly it has always been, although again, with exponentially greater control. While there have sometimes been slight periods of respite for the plebians, or as the Roman senate called them the mob. All this unrestrained fraud, and the madness of crowds, will touch everything, in ways conceived, and ways not yet conceived.

Gifts from the minds of madmen.

In reply to by Radical Marijuana

ChargingHandle Fri, 03/16/2018 - 14:08 Permalink

Deep state operatives and their powerful overlords have their targets set. Crush Russian banks and watch the dominos fall while sipping Isabella's Islay.