Page 36 - RUSRptAug18

The sale of these assets is the last step in the bank’s rehabilitation, before a merger slated to happen on January 1, 2019.
Trust bank is being turned into a bad bank that will consolidate the bad and non-core assets of the collapsed Garden Ring banks and other financial institutions that have found themselves in the CBR’s sick bank ward.
By the end of 2018, this bad bank is expected to be holding RUB2 trillion worth of bad debt, after which the bank cease accepting new assets and will spend 3-5 years trying to recover from value from the assets.
VEB published a macro projection for 2018-2021 with a base case featuring a pension age increase by half a year per year starting in 2020 . The very next day, the projection was deleted from VEB's website. The Minister of Economy announced at the "Russia: New Opportunities" Forum that such an increase is indeed being discussed, with several proposals on the topic already formulated. When prodded by journalists on where such discussions are occurring, he replied "in society." Both stories mark continued paralysis on pension reform, despite an increasingly evident need to do something: the number of workers per pensioner continues to shrink, as do pension benefits in real terms.
Russia's Finance Ministry warned that it would have a RUB204bn ($3.3bn) hole in budget revenues in it if state-owned enterprises (SOE) don’t pay out the 50% of profits they have been ordered to by the government ,InterfaxandV edomosti dailysaidonApril23citingunnamed sources in the government.
MinFin’s complaints is the latest in a running battle between the liberal fraction running Russia’s finances and the heads of Russia’s largest companies, most of whom run their enterprises like personal fiefdoms. MinFin continues to demand that state-owned enterprises pay the requested 50% of IFRS net profit in dividends, warning the Prime Minister Dmitri Medvedev that 2018 budget will have a big hole in it if they don't.
The 2018 federal budget plans to raise RUB380bn in dividends based on 50% of IFRS net profit, most of the state majors dodge. Gazprom natural gas giant alone will save paying the state RUB78bn by paying 25% of consolidated net profit.
Rosneftegaz holding controlled by influential ally of President Vladimir Putin Igor Sechin is another long-time rival of the Ministry of Finance in the fight for dividends , and still holds half of the RUB40.6bn interim dividends for January-June 2017 from Russia's largest oil company Rosneft. Rosneftegaz does nothing other than hold shares and has less than a dozen employees. Sechin is head of both the oil company and the holding.
Also Russian oil pipeline monopoly Transneft dodged the full dividend payout for 201 7. t is unlikely that given the favourable oil prices environment the government will manage to create urgency and will to have the oil and gas giants budge.
"It is worth indicating that the amount under discussion is equivalent to around a $2/barrel increase in annual oil prices, thus the negative effect on the budget in relation to the lower-than-expected dividends payments is clearly not an
36 RUSSIA Country Report August 2018 www.intellinews.com