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Report: Russian regulator ups value of noncore asset fund for bailed-out banks

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Report: Russian regulator ups value of noncore asset fund for bailed-out banks

The Russian Direct Investment Fund, or RDIF, will cooperate with the Central Bank of the Russian Federation on a fund holding bad and noncore assets of bailed-out banks, the regulator said May 24.

The fund could also participate in the activities of the fund by investing in its equity capital and could get seats on its board of directors, the central bank noted.

"The main goal of attracting RDIF to the management of the fund is structuring of noncore assets, defining a strategy for their introduction to the market and attracting investors to the projects and assets of the fund," said the regulator's deputy head, Vasily Pozdyshev.

The fund will be formed with assets from National Bank Trust PJSC, JSC Rost Bank and JSC Avtovazbank, all bailed out by the central bank with their parent companies in the second half of 2017. The value of the fund will reach around 2.1 trillion Russian rubles by the end of 2018, after which it will stop accepting additional assets but continue to operate for three to five years until the assets are sold at market prices, Vedomosti cited Pozdyshev as saying.

The central bank initially estimated the value of toxic assets to be transferred to the fund at 1.1 trillion rubles, but the sum was increased as the fund will also take over noncore assets from bailed-out lenders, Pozdyshev said. B&N Bank, bailed out by the central bank in September 2017, already transferred to the fund some noncore assets received from former owner Mikail Shishkhanov, the newspaper said in its May 24 report.

In addition to RDIF, the central bank will also cooperate with the Russian Deposit Insurance Agency on managing the noncore assets fund, Pozdyshev said. The scope of cooperation with the DIA is still under discussion, according to a source close to the agency.

As of May 24, US$1 was equivalent to 61.53 Russian rubles.