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Report: Sberbank to transfer defense sector loans to Promsvyazbank

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Report: Sberbank to transfer defense sector loans to Promsvyazbank

PAO Sberbank of Russia plans to transfer loans granted to Russian defense sector companies to PAO Promsvyazbank, Vedomosti reported March 20, citing Sberbank CEO Herman Gref.

The size of the portfolio to be transferred by Sberbank has not yet been determined. Gref reportedly also said that lenders are reluctant to transfer capital to Promsvyazbank together with their defense sector loans in line with the finance ministry's should accompany, and the issue is being discussed with the government.

JSC VTB Bank CEO Andrey Kostin was also cited earlier as saying that the lender is interested in offloading defense sector loans to Promsvyazbank, but is against the transfer of capital, Vedomosti noted.

Promsvyazbank, bailed out by the Russian central bank at the end of 2017, was chosen by the finance ministry to service Russian defense sector companies to protect other banks from potential U.S. sanctions. The finance ministry estimates that up to 1 trillion rubles worth of defense sector loans could be transferred to Promsvyazbank from other lenders.

As of March 20, US$1 was equivalent to 57.53 Russian rubles.