OREANDA-NEWS. January 28, 2010. The State Corporation “Deposit Insurance Agency” (DIA) announces beginning of implementation of further measures aimed at strengthening of the Commercial Bank “SOYUZ” (JSC) financial sustainability.

In the course of financial rehabilitation measures carried out in 2009 there was ensured continuous settlement of corporate and private customers’ accounts and fulfillment of the bank’s obligations, and its administrative expenses were significantly reduced. Thus, efficient operations of the CB “SOYUZ” (JSC) governing bodies in 2009 enabled stabilization of the bank’s current operation.

In the first quarter of 2010 the bank’s recapitalization is envisaged, i.e. its charter capital will be reduced in connection with additional reserve formation with subsequent stock issuance for the charter capital to go up. After the bank will conduct additional stock issuance and arrange closed subscription of the issue, its charter capital will be newly formed in the amount of RUR 5.0 billion. The controlling stock (50% of new shares + one share) will be purchased by DIA, and the remaining amount – by Joint Stock Insurance Company “Ingosstrakh”. Besides, DIA at the expense of earlier allocated resources will provide subordinated loan to the bank in the amount of RUR 5.0 billion for the term of 5 years, and during the first half of 2010 will purchase a portion of the bank’s long-term investment assets for the amount up to RUR 20 billion, partly at the expense of funds provided to the bank during 2009. As a result, the bank’s equity (capital) based on the results of the first quarter of 2010- may reach RUR 7.5 billion.

In accordance with the Russian Federation Federal law “On Additional Measures to Strengthen the Stability of the Banking System Through December 31, 2011”, #175-FZ, dated October 27, 2008 – DIA has sent a request to the Bank of Russia concerning entrusting it with the function of CB “SOYUZ” (JSC) provisional administration. Appointment of the provisional administration is deemed as a measure aimed at speeded up recapitalization of the bank supplementing its new organizational and ownership structure of the bank. Authority of existing governing bodies of this credit institution will be temporarily suspended in accordance with law. After the charter capital increase, the authority of the bank’s current governing bodies will be fully restored upon termination of the provisional administration.

During the provisional administration operations the bank will not change. All customers and depositors will be able to use the bank’s services, including effect settlements and payments, draw and deposit funds, obtain tranches within opened lines of credit on the basis of existing agreements’ provisions.

Implementation of the additional measures will set out conditions for the “SOYUZ” bank to further expand its capacity as a universal credit institution operating in accordance with common principles and regulatory requirements established for all banks.