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Report: Novikombank eyes capital boost

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Report: Novikombank eyes capital boost

Russianstate corporation Rostec intends to spend around 45 billion Russian rubles aspart of efforts to double the capital of Joint-Stock Commercial Bank Novikombank, Vedomosti reported April 3.

The lender'smanagement board head, Elena Georgieva, said that around 21 billion rubles willbe provided as part of Novikombank's additional share issuance, while theremaining amount will be contributed in the form of cash and propertycontributions, as well as subordinated loans.

Themain part of the planned capital increase will be used by the bank for businessdevelopment and to increase lending, while some of the funds will also bolsterNovikombank's reserves to provide it with additional financial stability,according to Georgieva.

Asource close to Rostec told the newspaper that the lender already received 8billion rubles as the first installment of the planned recapitalization.

Thestate corporation promised to increase Novikombank's capital after the Russiancentral bank recommended the lender in January to improve asset quality andcapital management, Vedomosti said.

Rostecearlier stated that it intends to increase its holding in Novikombank, thenewspaper noted, citing one of its sources as saying that the corporation wantsto consolidate 100% of the bank. Currently, Rostec controls 57.7% ofNovikombank.

As of April 4, US$1 wasequivalent to 68.18 Russian rubles.