Sovcombank completed the process of allocating blocked assets and liabilities

Sovcombank has completed the process of separating blocked assets and liabilities. Before the introduction of sanctions, the bank’s foreign currency assets accounted for about 20% of its balance sheet, but exactly how much of it ended up in the new structure is not known exactly. The restructuring will allow the bank to save on reserves and reduce pressure on capital. The assets were transferred to an independent non-profit organization, which is not formally associated with the bank. The organization plans to take steps to settle its obligations, and the proceeds, as the ANO assures, will go to charity.

Sovcombank told Kommersant that on September 15, the withdrawal of blocked assets and liabilities from the balance sheet of the credit institution was completed. This is the first officially known example of the completion of the procedure. The funds were transferred to the balance sheet of Assistance to International Settlements LLC with an authorized capital of 10 thousand rubles. The company, according to the Unified State Register of Legal Entities, is 100% owned by the ANO promoting the social inclusion of people with disabilities “Space of Equal Opportunities” (Everland project).

Banks received the opportunity to release blocked funds in July last year, when a law introducing relevant provisions into the current legislation (292-FZ) was signed. An extraordinary meeting of Sovcombank shareholders approved the procedure on September 22, 2022.

ANO “Space of Equal Opportunities” is not associated with the bank, they emphasized.

“The fact that the owner of the LLC is not under sanctions will simplify future interaction with creditors to resolve obligations,” explained Sovcombank.

As Kommersant was told by the ANO, as part of the work with creditors, it is planned to receive funds that “will be aimed at increasing the social integration of people with different types of disabilities.”

As Delcredere lawyer Karina Annenkova explains, according to the provisions of the Civil Code of the Russian Federation, when a company is reorganized in the form of a spin-off, the new organization partially receives the rights and obligations of its legal predecessor. Considering that the Everland charity project works with Sovcombank, “the bank decided to choose him as the founder of the new legal entity,” the lawyer believes.

“The company’s goal is to terminate obligations, and this is obviously not a systematically income-generating activity,” notes Mikhail Zhuzhalov, senior lawyer at Tomashevskaya & Partners. Therefore, he believes, it is logical to direct profits, if available, “to socially significant purposes.”

The volume of funds withdrawn from the bank’s balance sheet is not disclosed. According to banking expert Alexey Nechaev, at the end of January 2022, Sovcombank’s foreign currency assets reached 378 billion rubles. ($4.9 billion, about 20% of the balance).

Of these, the most obvious objects of blocking are the loan debt of non-resident companies (195 billion rubles), funds placed in them (10 billion rubles), as well as claims on non-resident banks (25 billion rubles). The bank also owned foreign currency debt securities worth RUB 53 billion.

“However, it is not at all necessary that all of them have by now become a “frozen” asset, since some of the issues could be exchanged for replacement bonds. In addition, some Russian issuers of Eurobonds switched to payments in rubles,” explains Mr. Nechaev.

Banks can carry out the procedure for allocating blocked assets until the end of 2024. First of all, its meaning is that in the future credit institutions may not care about the amount of reserves that need to be created for blocked assets, thereby removing the additional burden on capital, notes Alexey Kolosov, head of the audit services group for financial sector companies at Kept: “Further, all payments for obligations to non-residents will be made at the expense of the transferred assets.”

At the same time, according to 292-FZ, the volume of blocked assets and liabilities transferred off the balance sheet must be equal. Sovcombank could have a disproportion: the volume of blocked assets exceeded liabilities, admits one of Kommersant’s sources in the banking market. In such cases, banks can leave part of the blocked funds on their balance sheet, and Sovcombank could “withdraw only what the liabilities are enough for,” Kommersant’s interlocutor suggests. The bank only reported that it had ensured compliance with the requirements for equal value of the transferred property and liabilities.

Olga Sherunkova