October 12, 2017 / 8:12 AM / a year ago

UPDATE 1-Russia's Otkritie, B&N Bank bailouts to cost up to 820 bln rbls -c.bank

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MOSCOW, Oct 12 (Reuters) - Russia's central bank on Thursday raised its forecast for the cost of bailing out two of the country's biggest banks, saying it could now require up to 820 billion roubles ($14.22 billion).

Russia's banking sector is under intense scrutiny after the central bank had to step in to save two of its biggest private lenders in the space of a month.

Central Bank Deputy Chairman Vasily Pozdyshev has previously said troubled banks Otkritie and B&N Bank would require up to 400 billion roubles and 350 billion roubles respectively to return to financial health.

But speaking to Russian state television on Thursday, he said the total cost would now be between 800-820 billion roubles.

"In general and in total, the financial rehabilitation of one banking group will require around 450 billion roubles, and the second - around 350-370 billion roubles," he said.

Pozdyshev said the situation with the liquidity of the banks, which both suffered sustained runs on their assets, had improved under the central bank's management and investors were now putting money back into Otkritie.

"The outflows have stopped, and the situation with the liquidity of both banking groups has stabilised," Russia's RIA news agency quoted him as saying.

"The temporary administration (of Otkritie) send me daily reports, yesterday there was an inflow - a few billion roubles of business funds."

Pozdyshev also repeated central bank assurances that the bailouts had not diminished the credibility of the Russian banking sector, but warned future bank failures were still possible

"I think new bailouts could still happen because no one bank is insured against a serious outflow," he said.

$1 = 57.6800 roubles Reporting by Jack Stubbs, Polina Devitt and Polina Nikolskaya; Editing by Gareth Jones

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