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Report: VEB eyes 173B rubles capital boost from Sviaz-Bank transfer deals

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Report: VEB eyes 173B rubles capital boost from Sviaz-Bank transfer deals

State Development Corp. VEB.RF will get a 173 billion Russian rubles capital boost from transactions accompanying the upcoming transfer of its unit Interregional Bank for Settlements of the Telecommunications & Postal Services, or Sviaz-Bank, to PAO Promsvyazbank, Interfax reported, citing unnamed sources.

VEB will use the funds to set aside provisions on an old loan associated with the former owner of Globex Bank, which VEB merged with Sviaz-Bank in 2018, the newswire said Aug. 20.

The Russian finance ministry already issued 212.64 billion rubles worth of federal loan bonds ahead of the Sviaz-Bank transfer, which were purchased by VEB for 39.23 billion rubles and will be used by the financial institution to settle its financial obligations related to the bailout of Sviaz-Bank and Globex Bank by the Russian central bank.

VEB took control of Sviaz-Bank and Globex Bank following the 2008 financial crisis. The Russian government decided earlier in 2019 that the merged lender will be transferred to state-owned Promsvyazbank, which specializes in servicing Russian defense-sector companies.

As of Aug. 19, US$1 was equivalent to 66.82 Russian rubles.