Russian central bank rescues B&N Bank, becomes top investor

Andrey Rudakov | Bloomberg | Getty Images

A national flag flies above the headquarters of the Central Bank of the Russian Federation in Moscow.

Russia’s central bank agreed on Thursday to rescue B&N Bank by injecting extra capital, becoming the main investor in the troubled lender and its affiliated banks.

B&N Bank, Russia’s 12th biggest lender by assets, said on Wednesday it had requested a rescue because problem assets on its books were too great for it to handle.

The second major Russian bank bailout in a month has raised fresh questions about supervision and the stability of a banking sector buffeted by an economic downturn and Western sanctions.

Russia’s central bank said in a statement it will use money from its Fund for the Consolidation of the Banking Sector to improve B&N Bank’s financial stability.

“It is planned that the Bank of Russia will participate as the main investor,” it said, adding that it would not use a so-called bail-in of B&N Bank’s creditors for the rescue.

The rescue package would apply to B&N Bank, affiliated lender Rost Bank, and other banks in the group, it said.