Translated material
Consensus with reservations
The Development Bank is looking for its place in the stock market
Chairman of Vnesheconombank Vladimir Dmitriev expects that the bill on the Development Bank will pass final readings in the State Duma before the summer, and the bank itself will be created in the middle of the year. He made this assumption when speaking on Friday at the XVIII Congress of the Association of Russian Banks. “The point of return in the implementation of the project has been passed,” he said, recalling that the bill passed the first reading in the State Duma and “the interdepartmental consensus on the creation of this institution is now even more monolithic than before.”True, at the same time, the head of VEB announced the position with which officials of the Ministry of Economic Development and the Ministry of Finance are arguing, namely, about the place of the future Development Bank in the stock market. According to Mr. Dmitriev, the organization created on the basis of VEB itself, Roseximbank and the Russian Development Bank will not become a monopolist in the financial market: “This will not happen. The total volume of VEB's operations on the securities market is less than 10%. We not only do not interfere with the development of banks, but also promote the consolidation of their assets and the capitalization of the entire banking sector.”
Meanwhile, according to the position of the Ministry of Economic Development and Trade, the Development Bank can operate in the stock market only as part of the implementation of its projects. “The Development Bank is being created as a state corporation, which must have strictly limited powers and operate in strictly limited sectors of the economy, in which it will not compete with other companies. In the case of operating in the securities market, the Development Bank is involved in competition with professional participants, which contradicts the main idea of the functioning of the state corporation,” Anna Popova, director of the corporate governance department of the Ministry of Economic Development and Trade, told Vremya Novostei.
The position of the ministries looks convincing only in theory. If we try to implement it in practice, the government will have to regularly replenish the authorized capital of the Development Bank from budget funds. Or, having spent the initial capital on the first infrastructure projects, stop there.
Currently, VEB has licenses for brokerage, dealer, depository activities and trust management. Over the past few years, the securities market has provided the bank with the most profitable type of activity, the share of which in VEB’s profits amounted to 66-89%. It is not surprising that VEB asks that the Development Bank be allowed to work on the stock market without restrictions, otherwise the bank will not have the resources to cover the costs of capital-intensive projects that will be able to generate profits only several years after their launch.
As Mr. Dmitriev stated, the idea of creating the Development Bank is to invest funds in large projects with low profitability, so the organization will not compete with commercial banks. The head of VEB suggested that already in 2008 the Development Bank could issue up to 400 billion rubles. in the form of loans to the non-financial sector. By the end of this year, using funds on VEB’s balance sheet, the bank’s authorized capital will be formed in the amount of 70 billion rubles. According to Mr. Dmitriev, the bank's own funds will amount to 100 billion rubles by the end of 2007, and according to forecasts of the Ministry of Economic Development, by 2010 - 230 billion rubles.