International Industrial Bank (IIB), Russia’s ninth-largest bank by Tier 1 capital, has had its licence withdrawn and been taken into administration by the Central Bank of Russia (CBR). Both the corporate lender that formed the bulk of the bank, and its smaller retail banking subsidiary M-Plus, lost their licences. The move came less than three months after the bank had closed a deal with Eurobond holders to extend by one year, the maturity of a $200m bond due in July 2010, to help overcome a severe liquidity squeeze.
IIB was 80% owned by Sergey Pugachev, a senator for the Tyva region in southern Siberia and the majority shareholder of the OPK Industrial group. The bank was caught out by its reliance on wholesale and central bank funding and by its balance sheet concentration, both in lending and in corporate deposits. According to data from thebankerdatabase.com, IIB’s loan-to-deposit ratio rose to 182% by the end of 2009, from 162% in 2008.
