30 Nov 2017 18:41

Gazprom begins second stage of Gazprombank recapitalization with 3.9 bln rubles in perpetual deposits

MOSCOW. Nov 30 (Interfax) - Gazprom began the second stage of the recapitalization of Gazprombank , providing 3.9 billion rubles in perpetual deposits.

"We began issuing perpetual Additional Tier 1 bonds that the Gazprom group purchased. It is expected the overall volume of the issue will total 25 billion rubles," Gazprombank Executive Vice President Ignat Dirks said during a conference call with analysts.

The sale was part of the bank's recapitalization program, which stipulates a supplementary issue worth 60 billion rubles (placed in June) and provision of a subordinated loan for 25 billion rubles. "We have already placed bonds worth 3.9 billion rubles and will continue to do this," Dirks said.

"In July and August 2017 the Group received perpetual debt from Gazprom Group in the form of perpetual interest-free subordinated deposits in the total amount of RUB 3 880 billion," Gazprombank said in its 9M earnings report.

During the conference call, management also said that it estimated the effect on capital of IFRS 9, which Russian banks will begin employing next year, as being within the market range: about 70-80 basis points of the capital adequacy indicator.