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Abbreviation and Commentary
Hard currency - availability of foreign exchange licence (availability ruble license as well).
Rouble - availability only ruble license.
DIS - participated in the bank deposit insurance system, equivalent to availability licence to attract deposits of individuales.
NCO - non-banking credit organization.
AC - authorized capital of the bank. Registered with the Central Bank.
OF - Bank's own funds by Russian accounting standards.
IAS - International accounting standards.
RAS - Russian accounting standards.
CB - currency balance, that is the sum of all assets of the bank (without deducting Commitment), it is equal to the amount of all liabilities.
Three possible patterns of ownership for banks:
Co Ltd - Company Limited.
Open Joint-Stock Company - a business enterprise whose owners are issued shares of transferable stock but do not enjoy limited liability.
Closed Joint-Stock Company - with a limited number of participants who do not have the right to sell their shares without the consent of other shareholders.
Explanation to the formula (1):
TCB = CL + OF + BR
where TCB - a total cost of a bank;
CL-the cost of licenses for different types of licences given in pages:
-"Bid and Offer prices"
-"Other offers"
OF - the real market value of all bank assets minus all its commitments; OF is in fact nothing else than bank's own funds, but not on the formal calculation, as Central Bank require instruction on RAS and not motivated by judgement, as taken in IAS, but by "Hamburg" account, this is the real price, which will be paid by mutual agreement between buyer seller in excess of the value of the license, of course, differs from that OF own funds and RAS and IAS, although ideally they should all match and, incidentally, on the first day after the registration of the bank always match ...
BR- business rating - defined as a profit forecast for bank N-years after its sale (N = 4-5). However, in selling relatively small banks this prediction is zero, as well as clients and assets bank leave when his sales and profits, and if it is due efforts will be new team and the buyer, seller and not transferred. On the page "other offers" bank's price formula (1) reduced to two terms - CL + OF.
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