Newsletter January 2014: Liquidity squeeze triggered by Russian clamp-down

MOSCOW – The Central Bank of Russia (CBR) revoked the licences of five banks in December, including Investbank, the largest bank headquartered in the exclave of Kaliningrad. Investbank ranked 79 in Russia by tier 1 capital at end-2012 according to thebankerdatabase.com. This brings to 26 the total number of bank licences revoked during 2013. The largest was Masterbank, 46 by tier 1 capital, which lost its licence in November 2013 over alleged money-laundering and accounting irregularities. Several of the banks that lost licences in December, including Smolensky Bank and Project Finance Bank, had suffered deposit outflows and requested liquidity assistance from the CBR in the weeks leading up to their closure. In addition, two other regional banks – Solidarnost in Samara and Ellipse in Nizhny Novgorod – are receiving financial assistance from the Deposit Insurance Agency (DIA) to prevent collapse. Their existing shareholders may lose control over these banks.