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News of the banking sector for Monday

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News of the banking sector for Monday

News of the banking sector for Monday
July 19
16:00 2016

Central Bank: banks requests for refinancing is being reduced

According to the commentary of the regulator “Liquidity of the Banking Sector and Financial Markets “, the need of Russian banks in refinancing of the Bank of Russia in the current month, continuing the trend of June, will be reduced.

“In the coming months the inflow of funds via the budget channel will be continued. In July it will lead to the further reduction of the banks debt for refinancing operations “, said in the comment.

The Bank of Russia notes that, first of all, the inflow of liquidity through the budget channel last month influenced the decrease of the banks demand in the Central Bank refinancing.

“In this case the conversion of the Reserve Fund was not carried out in June. The budget deficit was financed due to balances on the budget system accounts in the Bank of Russia and proceeds of the Ministry of Finance of the Russian Federation due to OFZ placement,” – said in the document. In addition, the commentary focuses on the fact that the impact of the budgetary factor partially compensated the outflow of liquidity, which has provoked the seasonal growth of the cash amount in circulation.

“At the same time in August and September an increase in the required reserve ratios will influence the need of the banking sector in liquidity”, – said in the comment.

Shuvalov said that there wouldn’t be the sale of the state-owned VTB shares in 2016

After several consultations the Government of the Russian Federation decided not to sell the state stake in VTB this year. First Deputy Prime Minister Igor Shuvalov made this statement in the comments regarding the terms of state-owned sales in an interview with Business FM.

“According to VTB, we thought that the deal was possible within 2016. Then we consulted and decided that it was not the best time. We will not offer VTB shares this year “, – said Shuvalov.

Shuvalov did not give comments on the reasons for the decision. He only said that enough sales had been planned in the current year, including “Bashneft” and “Rosneft”. Also, he added that “something should be left for the next year.”

Even last month the head of the Ministry of Economic Development Alexei Ulyukayev said that the sale of 10.9% of VTB shares in the current year was questionable, partly due to the sanctions regime.

“First, let’s wait for the recommendations of investment consultants.  “Renaissance Broker” acts as an investment consultant concerning VTB. It is a complex story because the bank is in the sanctions list. It cuts off a large stratum of investors from the participation. So, we understand that it will be difficult to sign the documents. This is a substantial risk, which reduces the likelihood of the realization of this asset, “- said the Minister in his report to the press in mid-June. This statement was made when the Minister was answering the question whether the state-owned stake of VTB can be privatized this year.

At the beginning of the year the Government of the Russian Federation planned to sell 10.9% of the VTB shares in 2016, keeping only a majority stake.

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