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Regulator pushes for Russian Agricultural Bank recapitalization by 2018-end

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Regulator pushes for Russian Agricultural Bank recapitalization by 2018-end

The Russian central bank estimates that state-owned JSC Russian Agricultural Bank needs at least 40 billion Russian rubles of additional capital and would like to see the lender to complete recapitalization by the end of 2018, Vedomosti reported Sept. 2, citing sources close to the regulator and the Russian government.

Russian authorities are currently involved in discussions regarding the size and sources of additional capital for the lender, the newspaper noted.

Russian Agricultural Bank had bolstered its capital by 15 billion rubles earlier in 2018 via the issuance of subordinated perpetual bonds and was also promised 5 billion rubles from the federal budget, Vedomosti said.

As of Aug. 1, the lender's capital stood at 426 billion rubles under Russian accounting standards, and all its capital adequacy ratios exceeded regulatory requirements, the newspaper noted, adding that the bank may need additional capital in order to expand its business.

Russian Agricultural Bank has received around 300 billion rubles in additional capital from the state since 2010. In 2017, the bank obtained a 50 billion ruble capital injection and it was expected at the time that the funds would keep it going throughout 2018, Vedomosti said in March.

As of Aug. 31, US$1 was equivalent to 67.61 Russian rubles.