BOFIT Viikkokatsaus / BOFIT Weekly 2017/50

On Monday (Dec. 11), the Central Bank of Russia announced it had taken control of a 99.9 % stake in the troubled Otkritie Bank. The CBR last week estimated that bailout of the Otkritie Bank Group will require some 456 billion rubles (6.6 billion euros) in additional capital, an amount considerably higher than any previous bailout in Russia. The restructuring and integration of Bank Moskvy, originally owned by the City of Moscow, cost roughly 300 billion rubles.

At the beginning of 2017, the total assets of Otkritie Bank amounted 2.817 trillion rubles (44 billion euros), making it the country's largest private bank. Last summer Otkritie suffered a massive run on deposits, and the CBR placed the bank under administration at the end of August. By early November, the bank's total assets had shrunk to 2.109 trillion rubles (31 billion euros).

Today (Dec 15) CBR announced it has taken over another large private lender, Promsvyazbank. At the moment, half of Russia's 20 largest banks are either state owned or subject to central bank restructuring programs.