Page 86 - RusRPTFeb19

recent crisis years. VEB says it will get rid of bad banking assets and the new head of VEB Igor Shuvalov suggested that Svyaz Bank, which has been on the balance sheet of VEB since 2009 could be transferred to another bailed bank Promsvyazbank (PSB), Vedomosti daily reported on December 13. VEB received RUB212bn from the Central Bank of Russia (CBR) for the bail out of Svyaz Bank and another struggling bank, Globex Bank, which were later merged in 2018. VEB was planning the sell Svyaz Bank by 2020, but any possible deal has been stymied by the debt to the regulator. It was also planned to transform Svyaz Bank into the postal bank, but finally Russia's Post set up a Postal Bank with state-controlled VTB. PSB, in turn, is slated to become the "defence bank" by the Finance Ministry, servicing the military and industrial complex and shielding the rest of the banking system from potential sanctions. Previous reports already suggested that it could be merged with Globex, which made (and lost) its money in real estate. It is not clear whether VEB will have to repay the RUB212bn should the CBR and the Finance Ministry agree to merge the bad banking asset with PSB, one of the largest private banks bailed out in 2017 along with Financial Corporation Otkrytie. Letting VEB to get rid of Svyaz Bank looks like more de facto state support for VEB, analysts surveyed by Vedomosti believe.
A consortium of investors comprising the Russian Direct Investment Fund (RDIF), the Russia–Japan Investment Fund, and Middle Eastern sovereign funds have agreed to partake in a second round of investment in Sovcombank, the RDIF said in a statement on January 22. In 2018, the Russia–China investment fund, six Middle Eastern funds, and Japan’s SBI Holdings invested US $106mn in Sovcombank. “Since the time of investment by Russia–China Investment Fund and its partners Sovcombank has been showing consistent growth of key indicators. The bank was one of the fastest growing banks in Russia in the first nine months of 2018: its assets rose by 25%, and the return on equity reached 21%,” the RDIF said quoting its CEO Kirill Dmitriev. Expansion of the investor consortium would help Sovcombank improve its business, help the bank in merger and acquisition deals, and have a positive impact on the bank’s planned initial public offering (IPO), the RDIF said. The RDIF and the Russia–Japan Investment Fund also agreed with SBI Holdings on investment in SBI Bank, the Japanese company’s subsidiary in Russia, the fund said.
Russia’s Central Bank of Russia (CBR) says it will inject RUB77bn ($1.1bn) as loans to support the reorganization of Moscow Industrial Bank (MIB), which the regulator took over on January 21, according to Deputy Chairman of the Central Bank Vasily Pozdyshev, reported Interfax. MIB was focused on lending to legal entities: out of a total loan portfolio of RUB216bn loans to companies accounted for RUB183bn and for loans to individuals were RUB16bn. According to Pozdyshev, the non-performing loans (NLPs) and potentially problematic loans to legal entities account for RUB123bn of the total. The Central Bank estimated the size of the hole in the bank’s capital from RUB60bn to RUB100bn. After the start of rehabilitation, the bank will continue its work as usual.
86 RUSSIA Country Report February 2019 www.intellinews.com