Wed. Oct 28th, 2020

Sevastopol Marine Bank (SMB) announced the closure of a significant part of its branches. This bank is one of the two primordially Crimean banks that remained on the peninsula after joining Russia. In June last year, it was decided to reorganize it with the largest bank in Crimea, owned by the federal authorities, RNKB. And although, in general, the reorganization plan presupposed joining the SMB to the sanatorium, no one expected such a quick disappearance from the map of the peninsula, and a 10-year loan was issued for the rehabilitation.

Information about the closure of 12 operational offices of the SMB by November 5 is posted on the bank’s website. In total, according to the Central Bank, the bank has 34 offices (the regulator does not specify whether they all work). According to the radio station “Kerch FM,” the bank is closing “all operating offices.”

The RNKB, which is sanitizing the SMB, did not answer which part of the bank’s existing offices will be closed. They only reported that “the measures to close a part of the bank’s offices are being carried out within the framework of solutions to improve the efficiency of the service network.”

The plan provides for the reorganization of SMB in the form of joining the RNKB under a single RNKB brand, the bank is taking preparatory measures to integrate the business processes of the two structures, they added.

SMB is one of the two originally Crimean banks (the second is the Black Sea Development and Reconstruction Bank). Even before the annexation of Crimea to Russia, the bank was registered in Sevastopol and operated under a Ukrainian license. In 2014, after the peninsula transition to the Russian jurisdiction, SMB received a banking license from the Central Bank and continued to work. However, the bank failed, and an early 2020, a decision was made to prevent its bankruptcy. Since June 2020, SMB is undergoing a rehabilitation procedure with the Deposit Insurance Agency (DIA); the RNKB has been appointed an investor. A loan at a preferential rate for 740.9 million rubles was issued for the rehabilitation. For 10 years.

Initially, the reorganization plan meant that “in the future, there will be a reorganization of the SMB in the form of its joining the investor.” The dates were not indicated. And given that, according to Kommersant’s interlocutors who are familiar with the situation around the bank, the rehabilitation was an “image project” aimed at preventing bankruptcy and preserving the SMB “for a certain period,” “no one expected” such a quick accession to RNKB. The loan term of 10 years also suggested the long-term nature of the project.

We are constantly monitoring the problem of the availability of financial services in Crimea. Now the security there is slightly below average

The DIA told “Kommersant” that step-by-step preparatory measures are envisaged to integrate the SMB and the investor’s IT systems, optimize work with the client base of banks, and bring client service programs to uniform standards, and unify the work of divisions. “The return of funds provided to the bank is carried out within the timeframes stipulated by the participation plan and does not depend on the joining of the bank to the investor,” they said.

Experts are not surprised by the acceleration of developments. According to Viktor Petrov, head of Vegas Lex’s arbitration practice, “of course, the reorganization of a local bank is a more correct form of interaction than revoking a license or bankruptcy procedure with the subsequent possible bringing to the subsidiary liability of top management, etc.”. Mr. Petrov believes that this approach is focused specifically on social processes rather than economic ones.

Anton Rogachevsky, the senior lecturer at the Banking Department of the Synergy University, notes that a competent manager is still trying to minimize the bank’s losses and client’s risks. “If the merger takes place in a short period of time, this will allow RNKB to quickly take over interaction with all SMB clients without prejudice and loss of operational control and interaction with clients,” concludes Elena Kravtsova, director of the corporate law department of RKT.

 

 

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