Sberbank may be able to write off USD 2 billion state loan - Reuters

Wednesday 22 July 2020 09:19 CET | News

Sberbank may be allowed to write off USD 2 billion in a subordinated loan from Russia’s Central Bank as part of the state’s support for its largest bank during the COVID-19 crisis, according to Reuters.

Sberbank is being used to deliver state cash to help individuals and businesses survive the impact of the pandemic, however it has not received direct financial support so far. The finance ministry had agreed that the loan could be upgraded to boost Sberbank’s capital and may be even written off, three sources, speaking on condition of anonymity, told Reuters.

In a statement to Reuters, Sberbank confirmed USD 2 billion could be included in Tier 1 capital and could be written off under certain conditions. The upgrade would increase Sberbank’s flexibility to absorb potential losses after the two-month-long, country-wide lockdown left many Russians and companies with reduced revenues, the sources said.

In April 2019, the finance ministry bought a 50% stake in Sberbank from the central bank, meaning it has the right to claim back the USD 2 billion, which was part of a bigger subordinated loan the central bank has provided for Sberbank in the 2008-09 financial crisis, according to Reuters.

The central bank declined to comment and the finance ministry did not reply to a Reuters request for a comment.
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Keywords: loans, COVID-19, financial services, Russia, lockdown, Sberbank, Russia Central Bank, Finance Ministry
Categories: Banking & Fintech
Countries: Russian Federation
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