Rouble Crisis Sparks Russia Bank Bailout

Russia's central bank has announced a bailout of the troubled Trust Bank - the first such rescue in the country's currency crisis.

The Bank of Russia said it had placed Trust under its supervision and would hand it 30bn roubles (£341m) to avoid bankruptcy.

It did not officially confirm that the problems at the lender, whose products are advertised by Hollywood actor Bruce Willis, were linked to the currency's plunging value.

Trust - a mid-sized lender - had already been under pressure to boost its capital buffer before the currency came under intense pressure this month amid plunging oil prices exacerbated by Western sanctions.

The central bank's Deposit Insurance Agency was to supervise Trust's operations with immediate effect and a major bank was being found to provide additional investment, a statement said.

The decisions were taken at an emergency meeting and were designed to provide Trust with sufficient liquidity to continue operations without any repercussions for clients.

Unable to borrow on Western markets due to US and EU sanctions over Moscow's role in the Ukraine crisis, Russian banks have found themselves pressed by the plunge of the rouble, that has lost nearly half its value in the past year.

Rates on the interbank lending market, a barometer of confidence banks have in one another, have shot up in recent days, reflecting wariness and liquidity problems.

Last week, the central bank announced a number of technical measures to improve access to funds and parliament approved a recapitalisation plan.

The rouble's collapse, which extended to almost 80 roubles to the dollar at one point last week, sparked a boom in the purchase of 'big ticket' items in Russia such as TVs as people rushed to avoid inevitable price rises.

Companies including Audi (Other OTC: AUDVF - news) , Jaguar Land Rover and Apple (NasdaqGS: AAPL - news) introduced suspensions on the sale of products over fears they were priced too cheaply.

Moscow confirmed on Monday it was looking to support Russian airlines - also badly hit by the rouble's collapse.

Deputy Prime Minister Arkadi Dvorkovitch said he was considering credit guarantees and subsidies to support their operations.