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Avtovazbank secure Russia's central bank loan to settle debt with former parent

The Russian central bank offered JSC Avtovazbank a loan of 352.5 billion Russian rubles in April to enable the lender to pay back debt to former parent PAO Promsvyazbank while also possibly helping it to problem assets, Kommersant reported June 1.

Avtovazbank paid back a 114.2 billion ruble debt to Promsvyazbank, including an 18.2 billion ruble loan as well as 96 billion rubles of funds held by Promsvyazbank in a correspondent account with Avtovazbank. According to the new source, the value of Promsvyazbank's noncore and bad assets was estimated at around 250 billion rubles.

The bad assets of Promsvyazbank, which is being transformed into a lender servicing Russian weapon makers, will be transferred to a noncore assets fund being set up by the regulator.

The total value of assets to be transferred to the fund from Avtovazbank and Promsvyazbank will amount to 315 billion rubles, Kommersant said in a separate May 31 report. Otkritie Financial Corp. Bank and National Bank Trust PJSC will transfer to the fund 539 billion rubles and 332 billion rubles, respectively, while 745 billion rubles and 139 billion rubles will be transferred from JSC Rost Bank and B&N Bank.

Meanwhile, news agency Prime also reported May 31 that the Russian central bank intends to transfer some of the fund's shares to Otkritie Bank.

As of May 31, US$1 was equivalent to 62.38 Russian rubles.