The capital of “M2M Private bank” (M2M), the subsidiary structure of the Asian-Pacific Bank (APB), having liquidity problems, can be increased through bail-in, Forbes.ru reports, quoting Vedomosti and APB representative.

He explained that it means that clients will be able to acquire M2M shares at the expense of funds, placed in the bank. The interlocutor of the edition emphasized that the procedure of conversion of deposits into capital is not compulsory and will be agreed with clients.

During the conversation with the newspaper, Managing Director of the National Rating Agency Pavel Samiev reminded that previously bail-in was not applied in Russia; it was just partially used during the bank reorganization. He added that currently it is discussed to apply this mechanism towards Peresvet bank. “The procedure is not simple. The depositors held large deposits in the bank; it is not guaranteed that in case of revocation of the license, they will be able to return all funds”, Samiev added. 

Deputy Minister of Finance Alexei Moiseev noted that the voluntary bail-in is legitimate, as it virtually represents the acquisition of shares for money.

M2M ceased to make payments last week. APB reports that these “temporary difficulties” in making M2M payments are connected with short-term liquidity gap. According to Kommersant sources, familiar with the situation, since late October several private clients (in total, bank has several dozens of clients, they are all premium) took deposits from M2M, amounting to more than 2 bln rubles. These are 32% from the volume of individuals’ funds, placed at the bank, the edition informs.

The main shareholders of APB are the founders of gold miner Petropavlovsk​ Plc Peter Humbro, Alexei Maslovski as well as their partner Andrew Vdovin (hold shares in the supermarkets chain “Azbuka Vkusa” (Alphabet of Taste) through V.M.H.Y Foundation Holdings Limited).