23.10.2021

VTB loan for the purchase of Rosneft may have a negative impact on foreign exchange liquidity

According to RAS (101-F as of 09/01/2017), VTB had RUB 571 billion in ruble equivalent on accounts with non-resident banks. (~ 9.76 billion dollars), while only 149 billion rubles were attracted from non-resident banks. (~ $ 2.5 billion), i.e.

VTB Group has excess foreign exchange liquidity (USD 7.3 billion), which was formed by the bank due to deposits of individuals attracted by VTB 24 (as a result, this liquidity has a low cost – on average, the rate on foreign exchange deposits in the system is 0.9% year.).

These funds are sufficient to provide a CEFC loan, while it does not exceed a quarter of the total capital of VTB and VTB 24 (i.e., the N6 standard will not be violated). Recall that in January of this year in the Russian banking system there was an atypical surge in lending to non-resident banks (by $ 12 billion), in particular, the placement of Sberbank in foreign currency accounts with non-resident banks increased by $ 8 billion to $ 16.3 billion ., which could somehow be related to the structuring of the privatization of Rosneft (according to a press release from Glencore, Russian banks took part in the financing).

However, subsequently the volume of interbank loans from non-residents was reduced, returning to the level of December 2016, i.e., it is possible that Banca Intesa Sanpaolo (the lender of the Glencore + QIA consortium) syndicated a loan abroad (in whole or in part).

Thus, a new trade can cause a net outflow of foreign exchange liquidity from the system.

Note that by the beginning of September the banking system had exhausted its reserves (due to payments on external debt and capital outflow of the corporate sector). All other things being equal, its value is likely to increase due to the payment of external debt (the Central Bank could improve the situation by providing foreign currency financing to banks in one form or another, recall that in Q3 it was actively increasing its liabilities to non-residents).

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