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Bank Jugra eyes $500M capital boost from shareholders

PJSC Bank Jugra's shareholders decided to increase its capital by around $500 million by converting a subordinated deposit held at the lender.

The planned capital boost will help the bank increase its core Tier 1 capital ratio to 13.2%, the lender said May 29. The capital hike will be carried out as part of Jugra Bank's 2019 strategy, which also envisages 20% growth of the lender's assets and an improvement in its profitability, according to the bank's President Alexei Nefedov.

Bank Jugra's shareholders already recapitalized the lender by 4.75 billion Russian rubles earlier in 2017, with the funds coming from Radamant Financial, through which Russian businessman Alexei Khotin holds a 52.5% stake in the bank. In 2016, Bank Jugra shareholders provided a total of 28.6 billion rubles to boost its capital.

The Russian central bank requested the lender in mid-May to set aside additional loan loss provisions of between 46 billion rubles and 50 billion rubles, Vedomosti reported May 28, citing several market sources. The regulator also imposed a number of restrictions on the lender's operations with assets and liabilities, significantly limiting its business activities, the newspaper noted.

Nefedov did not confirm the imposition of regulatory restrictions on the lender but said the bank has sufficient resources to implement potential recommendations issued by the regulator, news agency Prime reported May 29.

As of May 29, US$1 was equivalent to 56.46 Russian rubles.