| MOSCOW, July 7
MOSCOW, July 7 Sberbank, Russia's
largest bank, has received a 200 billion rouble ($5.8 billion)
loan from the central bank at a time when the government is
trying to give domestic banks more capacity to lend to help to
reverse an economic slowdown.
Sberbank Chief Executive German Gref said last month that
Russian banks were experiencing a liquidity squeeze due to
fallout from the Ukraine crisis, which has complicated Russian
firms' access to capital markets.
State-owned Sberbank received the subordinated loan in June
and will use it to finance ongoing operations, the bank said in
a statement on Monday that accompanied its half-year results
based on Russian accounting standards.
Sberbank borrowed 500 billion roubles in subordinated debt
from the central bank at the height of the financial crisis in
2008 but subsequently repaid 200 billion of that loan.
Russian lawmakers have since given preliminary approval to
amendments to allow Sberbank to convert the debt it received
during the crisis into a new class of preferred share or
perpetual debt, potentially boosting its capital levels and
allowing it to lend more.
Analysts believe the latest cash injection into Sberbank is
on the same terms as the prior loan and would therefore also be
The bank declined to comment on whether it would participate
in the debt conversion scheme. The conversion was proposed by
President Vladimir Putin at an investment forum in St.
Petersburg earlier this year. Putin had said the government
would help big banks by allowing them to convert subordinated
loans to shares.
Sberbank said in May it would consider taking part.
Jason Hurwitz, director for financial sector research at
investment bank VTB Capital, said Sberbank would likely seek to
convert all of its subordinated central bank loans into
perpetual debt. He said this could help boost its level of most
highly-rated Tier 1 capital, used to assess a bank's financial
health and to support lending.
"It's our view that they are going to convert all the 500
billion into perpetual debt," Hurwitz said.
Under international capital adequacy standards, commercial
banks are meant to set aside sufficient capital to cover for
potential losses. Tier 1 capital includes equity, disclosed
reserves and retained earnings.
Hurwitz said Sberbank's new subordinated loan would also
improve liquidity at the state bank and that it was likely to
have been provided on relatively attractive terms.
"For subordinated debt, it's super cheap at only 6.5
percent, as we understand," he said. "And if it becomes
perpetual debt, it would be even cheaper."
Perpetual debt has no maturity date and is therefore similar
Sberbank's results showed that net profit fell around 3
percent in the first half of the year to 186.4 billion roubles
due to higher loan-loss provisions and taxes.
($1 = 34.5475 Russian Roubles)
(Reporting by Alexander Winning and Oksana Kobzeva; Editing by
David Holmes and Jane Merriman)