Russia's state development bank VneshEkonomBank (VEB) is going to request funding from the government and the Central Bank of Russia (CBR) to cover external liabilities, head of the bank Vladimir Dmitriev told the press after the meeting of the supervisory board of the bank. Such support could amount to RUB30bn annually until 2017, he specified. Dmitriev reminded that as of end of September's VEB's external liabilities amounted to about RUB70bn ($1.13bn), but the amount has increased due to recent currency market volatility.
Prime minister Dmitry Medvedev at the same supervisory board meeting announced that the government is going to inject RUB30bn into the capital of sanctioned VEB. It is not clear whether this recapitalization will be part of the ministry of finance plan to inject RUB1tn worth of OFZ bonds into the capital of systemic banks, with intermediation of the Federal Agency for Deposit Insurance (ACB).
Dmitriev estimated that, in 2014, the bank's losses will amount to RUB100bn, declining to below RUB50bn in 2015, without specifying the accounting standards used. He attributed the loss mostly to creation of reserves for losses, reminding that only for Sochi Olympic construction projects the bank reserved over RUB100bn.
At the same time VEB decided to inject RUB10bn worth of capital in the private Svyaz Bank and GLOBEKS Bank respectively, both directly and through subordinated loans, Dmitriev announced. It is not clear whether this is a part of the recapitalization scheme recently announced by the ministry of finance, under which VEB would prolong subordinated loans granted to banks in 2008-2009. Both banks were among 17 credit institutions to have received such support.
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