OREANDA-NEWS. July 17, 2015. In the course of off-site supervision of the activities of OJSC Tikhookeanskiy Vneshtorgbank, the Bank of Russia established facts of lending most funds in the interests of the core owner of the bank and related companies. Notably, funds raised by the bank from local households were used to maintain operations of the core owner’s controlled companies.

Considering numerous inadequate credit risk assessments by the OJSC Tikhookeanskiy Vneshtorgbank due to low-quality assets, the Bank of Russia repeatedly demanded from the bank to reclassify loan and related debt to allow for loan loss provisions in the amount stipulated by the Bank of Russia regulations.

Due to repeated enforcement actions and complete loss of equity (capital), by its order No. OD-783, dated 13 April 2015, the Bank of Russia revoked the banking licence of OJSC Tikhookeanskiy Vneshtorgbank from 13 April 2015.

The examination of the financial standing of OJSC Tikhookeanskiy Vneshtorgbank by the provisional administration established that the value of its assets did not exceed 2.9 billion rubles, while the value of its liabilities to the creditors totalled 3.9 billion rubles.

In these circumstances, on 28 May 2015, the Arbitration Court of Sakhalin Region issued a ruling on recognising the Bank insolvent (bankrupt) and on initiating bankruptcy proceedings. The state corporation Deposit Insurance Agency was assigned the receiver.

The Bank of Russia submitted information on the financial transactions bearing the evidence of criminal offence conducted by the former management and owners of OJSC Tikhookeanskiy Vneshtorgbank to the General Prosecutor’s Office, Ministry of Internal Affairs, and to the Investigative Committee of the Russian Federation for consideration and procedural decision making.