By its Order No. OD-155, dated 25 January 2019, the Bank of Russia revoked the banking licence of the credit institution commercial bank Evrokapital-Alliance (limited liability company) or LLC CB Evrokapital-Alliance (Registration No. 2672, the Yaroslavl Region, Pereslavl-Zalessky) from 25 January 2019. According to its financial statements, as of 1 January 2019, the credit institution ranked 322nd by assets in the Russian banking system.
The bank’s business model focused on issuing bank guarantees through a narrow network of intermediaries (agents) on non-market conditions which contradicted regular business practices. The portfolio of guarantees issued by the credit institution totalled 9 billion rubles and exceeded its capital more than sevenfold. Furthermore, a formal approach to assessing principals’ business resulted in a regular underestimation of credit risks under the issued bank guarantees assumed by LLC CB Evrokapital-Alliance, which prompted the regulator to repeatedly send respective orders to the bank. Moreover, the credit institution was involved in dubious transit operations.
The Bank of Russia repeatedly (eight times over the last 12 months) applied measures against LLC CB Evrokapital-Alliance.
The credit institution’s operations showed signs of misconduct by its executives who sought to withdraw liquid assets to the detriment of creditors’ and depositors’ interests. The Bank of Russia submitted information about the bank’s transactions bearing signs of a criminal offence to law enforcement agencies.
Under these circumstances, the Bank of Russia took the decision to revoke the banking licence of LLC CB Evrokapital-Alliance.
The Bank of Russia takes this extreme measure — revocation of the banking licence — because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
By its Order No. OD-156, dated 25 January 2019, the Bank of Russia appointed a provisional administration to LLC CB Evrokapital-Alliance for the period until the appointment of a receiver pursuant to the Federal Law ‘On Insolvency (Bankruptcy)’ or a liquidator under Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
LLC CB Evrokapital-Alliance is a member of the deposit insurance system. The revocation of a banking licence is an insured event as stipulated by Federal Law ‘On the Insurance of Deposits with Russian Banks’ in respect of the bank’s deposit obligations. This Federal Law stipulates the procedure and amount of insurance indemnities to the bank’s depositors.
