Page 73 - RusRPTNov18

The merger of Russian insurer Sogaz and the insurance arm of the country's largest bank VTB has been delayed , Vedomosti daily said on September 28, citing unnamed sources close to the company. Reportedly the deal that would establish the largest player on the Russian insurance market is postponed due to internal red tape and possibly due to delays in obtaining the go-ahead from the Federal Antimonopoly Service (FAS). The Sogaz-VTB deal was originally planned to be closed in the third quarter of 2018 for an undisclosed amount, with VTB getting 10% in the merged insurer. However, in June Central Bank of Russia officials said they will look for ways to discourage insurance companies from becoming "too big to fail" . The Vedomosti report does not indicate that the regulator somehow interfered in the deal. Sogaz underwrote RUB158bn ($2.5bn) of premiums in 2017, making it the country's largest insurance company. VTB Insurance had RUB80bn in premiums in 2017, Russia's fourth largest premium portfolio.
Russia's state development bank Vnesheconombank (VEB) could double its loan portfolio from current RUB3 trillion ($46bn) in the next five years, the newly appointed head of the bank Igor Shuvalov told the President Vladimir Putin on October 16. VEB that was on the brink of default in 2015-2016 overburdened by loans issued for Sochi Olympics construction and hit by sanctions, has been slated by Kremlin to become one of the main hubs of infrastructure spending drive after an appointment of Shuvalov, ex-Deputy Prime Minister and trusted Kremlin bureaucrat. After the appointment of Shuvalov, the bank started shedding non-core assets and could require an additional RUB1 trillion ($16bn) capital injection over the next five years, as well as receiving part of the RUB3.5 trillion Growth Fund to be established in 2019. The bank will also be allowed to become a major player on the pension fund market. Shuvalov now argues that VEB could raise 3- to 4-fold more loans given cooperation with Russia's largest banks, such as Sberbank, VTB, Gazprombank, and others. In September Vedomosti daily reported that VEB will start to form syndicates with commercial banks to increase the number and volume of investment projects under its mandate.
Russia will inject a further RUB20bn ($305mn) into bailed-out lender Promsvyazbank’s capital this year , in addition to the 5bn announced earlier, Deputy Finance Minister Alexei Moiseev said on Monday. Russia’s central bank took over Promsvyazbank in a bailout last year. The lender was then earmarked by the government to provide credit to the sanctioned entities so that other lenders could offload the risk.
Once Russia’s largest insurer, Rosgosstrakh in January-September 2019 cut its underwritten premiums by 23.9% year-on-year to RUB67.6bn ($1bn). The decline in premiums would have been more if it hadn’t been for an extra RUB6.4bn of premiums added to the company’s books following the consolidation of premiums paid to Kapital, an insurer recently merged with Rosgosstrakh and included in the books this reporting period, Vedomosti d aily noted on October 26. However, the financial health of Rosgosstrakh have improved and the decline in premiums slowed from the 44.6% drop seen in the first half of 2018, while in the third quarter alone RUB16.5bn of premiums it took in was a better result than the first two quarters of 2018. In the first quarter of 2018 Rosgosstrakh managed to post its first profit since 2014 . As of October, the profit was maintained and increased to RUB5.4bn, although without specifying whether the profit was due to the investment activity or its main insurance business. Analysts surveyed by Vedomosti s ee the results as
73 RUSSIA Country Report November 2018 www.intellinews.com