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2% of VTB's assets, and do not pose a serious threat to the bank. This is in line with the report by Fitch Ratings that argued in April that Russian banks appear able to absorb potential credit losses from their exposure to individuals and companies targeted by new US sanctions.
Russia's largest bank Sberbank announced that Dubai's Emirates NBD has agreed to buy Turkish Denizbank for $3.2bn , making the deal Turkey’s biggest banking take over since 2012. Sberbank originally acquired Denizbank for $3.5bn in 2012. "The news is quite negative for Sberbank, because earlier there was mass media speculation that the deal would be concluded at a price of over $5bn ," Aton Equity commented on May 22. With the extra proceeds from Deniz deal Sberbank "would likely have been able to raise its dividends for 2018," Aton believes. Nevertheless, the deal will still improve Sberbank's capital ratios and ROE, but the bank's stock is expected to be under short-term pressure by the analysts. "The transaction represents a significant milestone for Emirates NBD and is expected to be accretive to shareholders in the first year,” Chief Executive Officer Shayne Nelson said in the statement. Bloomberg reminds that Gulf lenders are expanding in markets like Turkey with acquisitions and license applications as they face limited expansion opportunities at home. Qatar National Bank has recently bought National Bank of Greece SA’s Turkish unit in 2016, while Commercial Bank of Qatar took over Alternatifbank AS the same year. Founded in 1997, Denizbank is the ninth largest lender in Turkey by assets. According to data from the Banks Association of Turkey, the bank’s assets stood at TRY 115bn ($29.2bn) as of end-September 2017. It had 697 branches and more than 12,000 employees. Relations between Turkey and the United Arab Emirates (UAE), of which Dubai is a part, turned sour when Ankara sided with Qatar after Saudi Arabia, the UAE, Bahrain and Egypt imposed a land, sea and air blockade against Doha last year over what they claim is its support for Islamist militants and intolerable closeness to Iranian policies. With relations remaining tense, the Arab world’s largest private broadcaster, Dubai-based MBC Group, earlier in March ceased showing Turkish television programmes including highly popular soap operas. Later in March, UAE Minister of State for Foreign Affairs Anwar Gargash hit out at Turkey, saying its policies towards neighbouring Arab states were not reasonable and that more respect should be shown for their sovereignty. “It is no secret that Arab-Turkish relations aren’t in their best state. In order to return to balance, Ankara has to respect Arab sovereignty and deal with its neighbours with wisdom and rationality,” Gargash wrote on Twitter on March 10.
The Central Bank of Russia (CBR) will inject an extra RUB18bn ($293mn) in capital into three private pension funds previously owned by bailed Financial Corporation Otkritie, Reuters said on May 21 citing unnamed sources. Previously in the beginning of the year the r egulator said that three non-state pension funds (NPF) of Otkritie will be consolidated and controlled by the CBR's Strategic Bank Consolidation Fund. Other private players on the pension fund market were alarmed by the arrival of a major state-controlled player. The CBR has already channelled RUB42bn into three NPFs Lukoil-Garant, NPF Elektroenergetiki and NPF RGS. Reportedly, additional financial aid will be used to replace non-performing assets held by the pension funds, Otkritie’s press office told Reuters. As of September 2017 the three funds to be merged (Lukoil Garant, NPF Elektroenergetiki and NPF RGS) held about RUB520bn ($9.3bn) in pension savings of about 8mn clients, making them the largest
55 RUSSIA Country Report June 2018 www.intellinews.com