January 22, 2016, 20:47 / Finance

VEB will receive help in February

The government continues to look for options to support the state corporation of Alexander Prokopenko

VEB will receive help in February / M. Stulov / Vedomosti

Vnesheconombank Chairman Vladimir Dmitriev expects that comprehensive support will be provided to the bank by mid-February. “Support measures, I am sure, will be implemented before mid-February this year,” he said in Davos, Switzerland (quoted by Interfax). “Specific figures have not yet been determined, they will be based on the budget’s capabilities and Vnesheconombank’s ability to sell liquid assets in order, together with the budget, to enable the bank to fulfill obligations to foreign and Russian creditors and ensure its activities as a development institution,” says Dmitriev ( quote from TASS).

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Measures to support VEB will be discussed at a meeting with the Prime Minister on February 3, the federal official knows. “The prime minister has several meetings planned on development institutions in the near future,” the prime minister’s press secretary Natalya Timakova told Vedomosti.

Options for state support through OFZs are still being discussed, says an official from the financial and economic bloc, the question is how much amount will be required. In December 2015, an official familiar with the government’s discussions told Vedomosti that we could be talking about an amount of 200 billion rubles. This figure was mentioned during recent discussions, the official confirms. is proceeding painlessly in the first quarter of 2016 According to Dmitriev, VEB ; funds will be needed in the second quarter. According to him, by 2020 VEB needs 1.3 trillion rubles. ($20 billion at the end of 2015 exchange rate) to fulfill obligations.

A representative of the Ministry of Finance said that the bank would not be left without the necessary assistance; the ministry submitted its proposals to the government at the end of 2015, and refused further comments.

Among other support measures discussed in the government are the placement of funds of companies that do not participate in the state corporation’s projects on deposits with VEB, and the issuance of special foreign currency bonds of VEB, which will be purchased by exporting companies, says a federal official and confirms an interlocutor at VEB.

At the end of last year, the government approved a resolution prepared by the Ministry of Finance to extend for five years the terms of subordinated deposits from the National Welfare Fund (NWF) placed with VEB, while simultaneously reducing the interest rate from LIBOR + 2.75/3.00% to 0.25 % per annum and establishing a grace period for interest payments for up to three years. According to IFRS principles, when raising funds at a rate below the market rate, the entire difference is taken into account as profit.

VEB also agreed with the Ministry of Finance on the placement of budget funds in the amount of up to 50 billion rubles. “Which will give us the opportunity to resolve current liquidity issues,” said Dmitriev (quoted by Interfax).

The Ministry of Finance proposes to link the issue of providing state support with the sale of liquid assets that are on VEB’s balance sheet, while the government is ready to compensate for VEB’s losses, but only to cover the difference between the purchase price and the sale price, Reuters reported. Such a measure is being considered, says a federal official, but as one of the options. It makes no sense to sell liquid shares of strategic companies this year, especially considering that these assets were initially acquired by VEB in 2008-2009. to support the economy in a crisis situation, says Vedomosti’s interlocutor at VEB. “The sale of these assets now could have a negative impact on the market,” he says. - In addition, the implementation of the established business of VEB's subsidiaries (RDIF, EXIAR, VEB Engineering) will require an independent assessment of the auditor for each of the companies and then the organization of a tender. This means that the sales operation will take a long time,” he points out.

Dmitriev said that in the first half of the year VEB plans to transfer Globex and Svyaz-Bank under the control of the Deposit Insurance Agency (DIA). In return, VEB plans to extend and reduce the rate on deposits previously attracted to the Central Bank for the rehabilitation of these banks. “In total, we paid the Central Bank more than 50 billion rubles. Several years ago they were converted into bonds with an interest rate of 2%. We expect that the rate will be lower,” he noted (quoted by TASS). The Central Bank is moving forward with regard to deposits, says a senior official. The DIA press service did not respond to Vedomosti’s request.