Russia’s central bank said that it will nationalise B&N Bank in the second rescue of a top lender in three weeks.
B&N asked for a rescue package yesterday after running into financial difficulties that saw it require emergency liquidity. The central bank will take a majority equity stake in B&N and Rost Bank, a failing lender it is absorbing with central bank funds, through a new fund, The Financial Times reported.
B&N, which is heavily exposed to Rost Bank, will be the eighth largest lender in Russia once the two banks are merged. Though neither is on the central bank’s list of "systemically important banks" – essentially a too big to fail designation – the regulator said B&N’s size made it "significant."
Last month, the central bank took over Otkritie, formerly Russia’s largest privately held bank by assets, to prevent what would have been the country’s biggest ever banking collapse. The central bank says Otkritie has a balance sheet hole of up to Rbs400bn, though senior state bankers say the real figure may be twice that.
