News

Media Statement

14.06.2019

Baring Vostok notes statements by Bank Vostochny regarding the implementation of the Central Bank’s requirement to create RUB 5 billion in new provisions, primarily in relation to bad loans in Vostochny’s corporate portfolio. However, Baring Vostok funds are very concerned about potential violations with the bank’s formal approach to meeting the Central Bank requirements, and about continuing issues with Vostochny’s asset quality that may require an additional RUB 10-15 billion of provisions be created.

Bank Vostochny’s statements regarding the full implementation of the Central Bank’s requirement raise doubts about the formal approach to such requirements, given the ongoing restructuring of the bank’s corporate loans. The only way to technically and temporarily avoid yet more new provisions being required is to continue restructuring the toxic loan portfolio associated with Artem Avetisyan’s Leaders’ Club members, bypassing standard corporate procedures. Should this take place, it will be contrary to the interests of the bank’s depositors, bondholders and other stakeholders.

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