The State Corporation “Deposit Insurance Agency” (hereinafter referred to as DIA or the Agency) has summed up its operating results for the year 2014.
By the end of 2014 the aggregate amount of insured deposits has reached 18.3 trillion rubles, having increased by 1.5 trillion rubles (by 9 %) as compared with 2013. The estimated total amount of covered deposits as of the year-end amounted to 12.7 trillion rubles (69.4 % of all eligible deposits).
As of December 31, 2014 the amount of the Compulsory Deposit Insurance Fund (the Fund) was 83.6 billion rubles. In April 2014 a Federal Law became effective whereunder, in order to ensure the financial stability of the deposit insurance system (hereinafter referred as the DIS), the Agency may obtain loans from the Bank of Russia in order to finance the payment of indemnities in respect of deposits. The Agency’s calculations have shown that the expected Fund size in 2015 will be sufficient for all foreseen payouts to insured depositors.
The reporting year saw the following decisions to improve the basic parameters of the DIS:
- the maximum insurance indemnity was increased twofold – to 1.4 million rubles;
- effective starting April 2, 2015, escrow accounts, whose purpose is settlements in respect of residential real estate purchase and sale transactions, will be separately insured (the maximum insurance indemnity is 10 million rubles); and
- effective starting July 1, 2015 a mechanism for differentiating the rates of banks’ insurance premiums to be paid to the compulsory deposit insurance fund will be introduced.
In addition, in December 2014 the Agency was vested with a new function, namely taking measures to increase the capitalization of Russian banks. To this end the Russian Federation contributed to the DIA’s property federal loan bonds in the amount of 1 trillion rubles.
The reporting year is characterized by a notable increase in the number of insured events and the total amount of insurance indemnities paid in their respect. The year 2014 saw the revocation of banking licences from 61 DIS member banks (in 2013 the number of such banks was 27). The total amount of the Agency’s insurance liability in respect of these events was 189.8 billion rubles to 1.18 million depositors. As compared to the previous year, the amount that was paid-out to insured depositors increased almost twofold (from 103.9 to 202.4 billion rubles), and the number of reimbursed depositors rose 1.5-fold (from 369 to 579 thousand). All in all, since the start of DIS operation in 2004, by January 1, 2015 the Agency faced 218 insured events, and the total payouts to insured depositors have amounted to 390 billion rubles.
Since the beginning of 2014 the Agency has been insuring individual entrepreneurs’ deposits; in the reporting period, 12.1 thousand entrepreneurs were received insurance indemnities in the total amount of 967.3 million rubles.
In the reporting year the Agency accepted the Bank of Russia’s proposals to participate in bankruptcy prevention (resolution) in respect of 14 banks. Resolution procedures were completed in respect of 4 deposit-taking institutions (BashInvestBank CJSC, KIT Finance Investment Bank (OJSC), Bank Narodny Credit OJSC, and My Bank. Ipoteka (OJSC)).
The resolution projects were implemented in a number of major banks (Baltiyskiy Bank OJSC and TRUST National Bank OJSC). The implementation of a number of comprehensive resolution projects, with respective measures simultaneously applied to several interconnected banks (ROST BANK OJSC, KEDR Commercial Bank OJSC, TverUniversalBank OJSC, SKA-Bank OJSC, and AKKOBANK OJSC), was a characteristic feature of the reporting period.
In 2014, the temporary rules for the prevention of banks’ bankruptcy were formalized in the legislation as permanent ones as the effectiveness of existing resolution mechanisms was recognized as high.
As part of the efforts to manage bankruptcy proceedings (liquidation), in the reporting year the Agency undertook the management of 71 failed deposit-takers. As of December 31, 2014 the Agency was performing liquidation procedures in respect of 180 banks; 153 of them were subjected to bankruptcy proceedings and 27 to the forced liquidation.
The amount of proceeds from the sale and return of assets into the bankruptcy estate in 2014, as compared to the previous year, increased threefold thanks to proceeds from outstanding loan repayment and recovery. 31.6 billion rubles were allocated to meeting claims of the failed banks’ creditors; this is the maximum figure for the entire period of the Agency’s operations.
The average level of satisfaction of creditor claims against banks in which liquidation proceedings were completed in the reporting period was 39.5 %, which is 1.7 times more than the average figure for the entire period of the Agency’s operations, namely 23.1 %.
Since 2014 the Agency has been performing the functions of a bankruptcy trustee in respect of private pension funds that carry on the activities of compulsory retirement benefits insurance. As of December 31, 2014 the Agency was performing liquidation procedures in respect of 5 private pension funds; claims of 1,632 creditors in the total amount of 758.5 million rubles have been identified.
In order to pay compensations to depositors of Ukrainian banks that had discontinued their operation in the territory of the Crimean Federal District, in accordance with Federal Law dated April 2, 2014 No. 39-FZ “On Protecting the Interests of Individuals Who Have Deposits in Banks and Standalone Structural Subdivisions of Banks Registered and (or) Operating in the Territory of the Republic of Crimea and the Territory of the Federal City of Sevastopol”, the Agency established the Depositor Protection Fund, an autonomous non-commercial entity. As a result, 188 thousand depositors from the Crimean Federal District contacted agent banks for compensation and were paid 24.9 billion rubles.
In order to improve interaction with depositors of failed banks, in 2014 the Agency established a Public Council for interacting with creditors of liquidated financial institutions. Among the first results of the Council’s efforts one can note the initiation of legislative amendments that promote the improvement of creditors’ protection.
In 2014 the Agency continued developing multilateral and bilateral cooperation with foreign deposit insurers. In the reporting year the Agency’s General Director (who is a member of the Executive Council of the International Association of Deposit Insurers (IADI)) was elected Deputy Chair of the IADI Finance and Planning Committee. Under the Agency’s leadership the IADI continued implementing its international research project to consolidate existing approaches and practices of Dealing with parties at fault in a bank failure and fraud in deposit insurance.
The DIA’s annual report will be posted to the Agency’s official website (section “About DIA/Annual Reports”).