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Promsvyazbank to get up to 1T Russian rubles in defense sector loans

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Promsvyazbank to get up to 1T Russian rubles in defense sector loans

PAO Promsvyazbank could receive up to 1 trillion Russian rubles in defense sector loans, which will be transferred to the lender from other banks, mainly state-owned PAO Sberbank of Russia and JSC VTB Bank, Reuters reported Feb. 15, citing Russian Finance Minister Anton Siluanov.

The official also said the lender is set to obtain between 80 billion Russian rubles and 100 billion rubles in capital via special instruments that the Russian government used in the past to support the banking sector.

The Russian central bank moved to bail out Promsvyazbank in December 2017. The finance ministry decided it would become a specialized lender servicing companies from the Russian defense sector, a move aimed at protecting other banks from potential U.S. sanctions. The bank will be transferred into government ownership and recapitalized in the first quarter of 2018.

Meanwhile, Promsvyazbank's former owners Dmitry and Aleksey Ananiev filed a lawsuit with Moscow Arbitration Court against the Russian central bank to contest the launch of the financial recovery procedure for the lender and its placement into provisional administration, Kommersant reported Feb. 16. The paper noted that so far no similar cases launched by former owners of troubled banks have ended with a court ruling in favor of the plaintiffs.

As of Feb. 15, US$1 was equivalent to 56.58 Russian rubles.