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Banks with unsatisfactory profitability will be evaluated less severely
Practical Law UK Legal Update 9-500-4994 (Approx. 2 pages)
Banks with unsatisfactory profitability will be evaluated less severely
by White & Case LLP
| Published on 13 Sep 2013 • Russian Federation |
This article is part of the PLC Global Finance September e-mail update for the Russian Federation.
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Under a directive of the Central Bank, its territorial departments regularly evaluate the economic position of banks, following which such banks are assigned one of five classification categories. The Central Bank has issued an amending directive so that banks having unsatisfactory profitability will be assigned the third classification category (rather than the fourth as previously).
On 5 August 2009 the Central Bank issued Directive No. 2267-U amending its Directive No. 2005-U "On the Evaluation of Banks' Economic Position," dated 30 April 2008. The Directive entered into force on 2 October 2009.
According to Directive No. 2005-U, the Central Bank's territorial departments regularly evaluate the economic position of banks, following which an evaluated bank is assigned one of five classification categories.
The amendments provide that banks having unsatisfactory profitability will be assigned the third classification category (rather than the fourth as previously).
Note, however, that according to Central Bank Directive No. 2226-U, dated 24 April 2009, effective until 31 December 2010, a bank's profitability is not to be taken into account for that bank's classification.