VEB coping with external debts, portion of 2017 subsidy diverted 'to more important needs' - Siluanov
MOSCOW. Sept 28 (Interfax) - Vnesheconombank (VEB) is meeting its obligations to external creditors and the government will allocate a portion of its subsidy to "more important needs," Finance Minister Anton Siluanov told reporters.
The Finance Ministry wants to cut state assistance to VEB not only in the upcoming 2018-2020 period, but in 2017 as well. The draft budget amendments published on Wednesday would reduce the originally planned subsidy by 42.4 billion rubles this year, that is, VEB, which received a total of 107.6 billion rubles in state support in March and June, would not receive any more money from the budget this year.
The money was provided to VEB as compensation for the external debt repayment expense and for losses stemming from the transfer of assets to the Treasury free of charge.
"Last year we helped with 150 billion rubles. This year we see that VEB will turn a profit. It is operating well, stably. This indicates that VEB is coping with current problems, paying down debt. As a matter of fact, what was the goal? To ensure that VEB met its obligations, including to external creditors, and VEB is doing that. The Finance Ministry has helped with liquidity and capital. Therefore, we see that today there is the opportunity to use the money for more important, more essential government needs," Siluanov said.
On Wednesday, VEB did not comment on the Finance Ministry's plans to cut its budget financing for 2017. However, in comments on earlier announced plans to cut its annual subsidy in 2018-2020 to 100 billion rubles a year from 150 billion rubles, VEB said the cuts would compel it to either refinance external debt using market sources or lower the volume of support for the Russian economy.
VEB must pay about 240 billion rubles a year on its external debt in 2018-2019.
"We were counting on that money. From the standpoint of additionally raising it - these will be expensive resources for us. We have a whole set of alternatives. Will we survive? We will, but how good this will be for the economy, the extent to which we can lend in the same volumes to the economy, the extent to which we can post results in the same volumes - of course not, because these other resources will be expensive," VEB First Deputy Chairman Nikolai Tsekhomsky said earlier this week, adding that this situation may result in a net loss for VEB in 2018.
VEB's financial result this year is up in the air given the proposal to cut its subsidy, which hasn't been approved by the State Duma yet. However, Siluanov thinks VEB might turn a profit.
"We supported VEB, which in essence was on the verge of failing to meet its obligations. Now we see that the bank is growing, that we will be able to see a profit at this organization for the year as a whole," Siluanov said in the State Duma on Thursday.
VEB's IFRS net loss widened to 61.6 billion rubles in Q2 2017 from 24.5 billion rubles in Q2 2016. It had a net loss of 47.6 billion rubles in H1 2017 (including a net profit of 14 billion rubles in Q1 2017) compared with 82.8 billion rubles in H1 2016.