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Report: Sviaz-Bank to get more funds from VEB before handover to Promsvyazbank

Interregional Bank for Settlements of the Telecommunications & Postal Services, or Sviaz-Bank, is set to receive an additional 12.8 billion Russian rubles from its current parent company, State Development Corp. VEB.RF, Kommersant reported Aug. 19.

The planned capital boost is most likely needed ahead of Sviaz-Bank's transfer to its new owner, PAO Promsvyazbank, which is part of a plan to boost the latter's capital, according to the newspaper.

Sviaz-Bank is currently in the process of transferring its distressed assets to VEB and has been increasing its loan loss provisions for the remaining part of its assets, Kommersant said, noting that overdue loans constituted 34% of the lender's portfolio after the first half of 2019.

Sviaz-Bank's capital is currently at a satisfactory level, but the bank will have to make sure it has a sufficient capital buffer before it is taken over by Promsvyazbank so the ownership changes would not have a negative effect on the new parent's capital ratios, the newspaper noted.

As of Aug. 16, US$1 was equivalent to 66.42 Russian rubles.