Page 69 - RusRPTAug19

those private banks that went down in the mini-crisis and the first bank to be restructured through the CBR’s Fund of Consolidation of the Banking Sector (FKBS) that was set up earlier last year. Starting in August 2017 the central bank spent RUB456bn on the re-capitalisation of the bank, with RUB710bn provided by the CBR as of December 2018. Currently Otkritie complies with all the capital requirements and even turned in a profit last quarter, reports Vedomosti. Previously another major bailed private bank Promsvyazbank sued its founders the Ananyev brothers for RUB282bn. The CBR spent over $40bn bailing out Otkritie, Promsvyazbank, and Binbank (aka B&N Bank) since they were nationalised in 2017. As reported by bne IntelliNews in February, the former CEO of Otkritie Evgeny Dankevich has been put on a wanted list by Russia’s Investigative Committee, accused of embezzling RUB34bn ($518.5mn).
On July 3, 2019, Gazprombank began issuing a “Family Mortgage” under a program with state support at 4.9% per annum, which is valid for the entire loan period – by far the lowest rate on the market. Previously, Gazprombank credited program participants at 6% per annum only in the first three or five years of the mortgage (depending on the number of children). Citizens at the state-subsidized rate can get citizens who have a second or subsequent child in the period from the beginning of 2018 to the end of 2022, when buying an apartment in a newly built or finished building. The minimum down payment - 20% of the cost of housing, the amount - up to RUB12mn. for Moscow, Moscow region, St. Petersburg and the Leningrad region and up to RUB6mn in other regions. Now the maximum allowable rate of such a mortgage for the borrower is 6% per annum. It can be increased by 4 percentage points if the borrower cancels it or refuses to extend personal or property insurance contracts during the subsidy period, its press service reports.
The CBR intends to sell bank Otkritie in 2021, the board of directors of the Central Bank said on June 2. Currently the CBR is reorganizing the bank. Measures to prevent bankruptcy allowed to ensure the smooth operation of the bank, according to the Central Bank. As the regulator notes, reserves for possible losses on troubled assets were formed, and Otkrytie’s stable financial position was restored. Now the bank complies with all requirements established by the Central Bank, the regulator said. “The Bank of Russia plans to sell the shares of FC Otkritie in 2021,” the report says. How many shares will be sold, the Central Bank will determine later, taking into account market conditions and the results of the bank, the regulator concluded. Otkritie was another one of the so-called Garden Ring banks that went bust at the end of 2017.
8.2 Central Bank policy rate
The Central Bank of Russia (CBR) cut the key rate by 25 basis points to 7.25% on July 26, noting continued inflation slowdown, the regulator says in its press release.
"Inflation slowdown is continuing. At the same time, inflation expectations remain elevated. Russian economy’s growth rate is coming in lower than the Bank of Russia’s expectations," the Central Bank says.
Russia's annual inflation, taking into account monetary policy, will return to 4%
69 RUSSIA Country Report August 2019 www.intellinews.com