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East Bridge Bank to sell blocking interest to foreign banks

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NIZHNY NOVGOROD, August 24 (RIA Novosti) - East Bridge Bank said Thursday it intends to sell a blocking package of its shares to foreign banks for 2.2 billion rubles (about $81.5 million) by mid-November.

In 2005, the Central Bank of Russia made a decision to exclude East Bridge Bank from the deposit insurance system, which allows credit institutions to take household money on deposit. A Moscow arbitration court invalidated the monetary regulator's decision but a court of appeals satisfied the regulator's petition August 4. East Bridge Bank had to announce August 6 that it was suspending its household deposit operations.

"Due to the failure to join the deposit insurance system, the bank intends to sell its shares at 100% of par value," Board Chairman Valery Kalachyov said.

East Bridge Bank, with net assets of 2.98 billion rubles (about $110 million) and a shareholder equity of 1.04 billion rubles (about $38.5 million) as of January 1, 2006, said it would send offers to bid for 25% plus one share from its stock to about 50 foreign credit institutions. The bank also said it would have to transfer its retail business to Pushkino Bank, if this effort failed.

Pushkino Bank, in which East Bridge Bank holds a 95% stake, operates in 16 cities of the Moscow Region and has been admitted to the national deposit insurance system.

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