Translated material
Retirement perspective
VEB will have another tool for the “silent”
Vnesheconombank may receive the right to invest pension savings in mortgage-backed securities that are not backed by government guarantees. The corresponding amendments to the legislation were prepared by the Ministry of Finance and submitted to the government for consideration. “We hope that this issue will be resolved in the near future,” said Vladimir Lukov, deputy director of the Department of Financial Policy of the Ministry of Finance, speaking yesterday at a meeting of the commission on banking activities of the RSPP Council on Competitiveness and Industry Strategies. Market participants believe that this decision will not only lead to the diversification of VEB's investment portfolio, but will also encourage banks to issue more mortgage-backed securities.As is known, VEB, which is a state management company, is very limited in the choice of financial resources for investment. Currently, he can invest funds of future pensioners only in those securities that are issued by the state or backed by its guarantee.
VEB has long proposed to allow it to diversify its investment portfolio, justifying its position by the fact that the management company is experiencing an acute shortage of financial instruments. As stated in the materials presented by VEB for the meeting at the RSPP, mortgage-backed securities are already secured in the form of mortgage coverage and give the owner the right to foreclose on it. “Thus, the requirement for additional guarantees from the state in order to ensure the reliability of investing pension savings does not seem sufficiently justified,” the document says.
The Agency for Housing Mortgage Lending believes that allowing VEB to invest in mortgage-backed securities will have a beneficial effect on the development of the housing lending market. “This allows banks to obtain financing from the domestic market. In this way, the goal of reducing lending rates on ruble mortgage loans is achieved. And this stimulates the development of ruble mortgages,” says Anna Yartseva, director of the agency’s communications department.
“The emergence of a large investor ready to buy such securities will certainly lead to an increase in the issue of such securities by Russian banks engaged in mortgage lending,” believes Anatoly Milyukov, vice-president of Gazprombank, general director of Management Company Gazprombank - Asset Management. “Banks will begin to issue more loans, knowing that they can then securitize them and these securities will be bought.”
So far, Russian banks prefer to issue foreign currency mortgage securities and place them abroad. Currently, only Gazprombank has placed them in Russia in the amount of 1 billion rubles, the yield on them amounted to 7.27% per annum. “When investing in such instruments, you can hardly count on very high returns. Mortgage-backed securities are considered very reliable while there are very few of them on the market, so the investor will not be able to make a lot of money on them,” notes Mr. Milyukov.
We also note that VEB proposes to lift restrictions on other instruments, in particular to allow investing in bank deposits. The lifting of the ban “will lead to the formation of a real source of additional resources in banking turnover without significantly increasing the risks of conducting transactions with pension savings funds,” VEB believes. Another proposal is to allow the placement of funds in corporate bonds, which are issued to finance investment projects using the public-private partnership mechanism, including those providing for state support from the investment fund. However, decisions on these proposals have not yet been made; as Mr. Lukov said yesterday, they still need to be considered.