Promsvyazbank lay down on the bottom

The bank has stopped disclosing its securities reporting, fearing possible US sanctions.
Promsvyazbank (PSB), on the basis of which a basic bank of the Russian defense industry is created, did not disclose the quarterly report of the issuer for the first quarter in the 45 days allocated by law. The bank could have classified the document (as well as reports on material facts), given that it contains information about the bank's management that runs the risk of getting under personal sanctions. This behavior threatens the ordinary issuer with a fine, but the regulator can make an exception in relation to the bank.

The quarterly report on securities of the PSB for the first quarter of 2018 has not yet been disclosed either in the Center for Disclosure of Corporate Information or in the relevant section of the bank's website. According to the Regulation on Disclosure of Information by Issuers of Equity Securities, issuers should disclose such reports within 45 days after the end of the quarter, in this case no later than May 15. The situation does not provide for exceptions. Also, the bank has not published a single report on significant facts since the end of April. A year ago, in the first 20 days of May, there were seven such messages, two seventeen years ago. After the beginning of the readjustment in mid-December 2017 and until the end of April, the bank published on average more than ten significant facts per month.

Prior to the rehabilitation, the PSB belonged to the brothers Dmitry and Alexei Ananiev. In early 2018 it became known that the PSB would be transferred to the Federal Property Management Agency, and on its basis a support bank would be established to service the state defense order and large state contracts. The head of the temporary administration of the bank, Petr Fradkov, earlier said in an interview with Kommersant that for the PSB there are risks of falling under international sanctions because of servicing defense and sanctioning companies, so the credit organization is working out various scenarios for the development of events. In early May, Kommersant sources reported that the DPM is considering the possibility of securing the leadership to protect it from falling under personal sanctions.

The PSB declined to clarify the situation, the Central Bank does not comment on the current banks. Experts do not see any other reasons why the PSB could not disclose the quarterly report, except for obtaining a proper permit.

According to the analyst of the international rating agency Fitch Alexander Danilov, if it is not an accident, and the bank really wanted to classify the leadership, then the refusal to publish the report will be explained: it reveals how the management is disclosed. On the other hand, in his opinion, the bank could "simply exclude some of the information from this reporting."

Managing Director for Banking Ratings Expert RA Alexander Sarayev noted that in standard situations, a joint stock company that did not fulfill the obligation to disclose the issuer's quarterly report in accordance with the current legislation is brought to administrative responsibility. "As a rule, in the form of a fine, although in some cases it can do without a fine in view of the insignificance of violations," he clarifies. "There are no serious sanctions on the part of the regulator in this respect."

The Bank of Russia has already developed a number of measures that allow to classify information on persons under sanctions and on deals related to state defense order. Apparently, the co-owner of "Renova" and "Rusal" Viktor Vekselberg took advantage of the new law. Prior to entering the sanctions list on April 6, 2018, he appeared among the shareholders of the bank "International Financial Club" and Metkombank, but then disappeared from the relevant documents. However, cases of information hiding not about shareholders, but about the management of the bank are not yet known. All banks under sanctions, whose securities are traded on the exchange, publish quarterly reports.