VEB posts record 250 bln rubles loss for 2014 on higher provisions
MOSCOW. April 30 (Interfax) - Vnesheconombank (VEB) had net losses of 249.7 billion rubles to International Financial Reporting Standards (IFRS) in 2014, compared with 8.5 billion rubles profit the previous year, the state development bank said in a statement.
The losses were caused by considerable growth in provision charges for Ukraine and the construction of facilities for the 2014 Winter Olympics.
VEB last posted losses, totalling 81.3 billion rubles, in the crisis year of 2008.
It had losses of 163.8 billion rubles in Q4 2014 alone.
VEB had to make provisions of 326.1 billion rubles for asset impairment in 2014, compared with 127.1 billion rubles in 2013, most of them for Ukraine-related credit risks and loans issued for the Sochi Olympics, the bank's deputy chairman, Sergei Lykov, told reporters, without specifying how much was provisioned for Ukraine and how much for the Olympics.
"We decided in 2014 to create a certain reserve to cover, to a significant extent, the danger of loans not being repaid on time," he said.
VEB anticipated having to create provisions for the Olympic loans as the bank on instructions from the government, has frozen current payments from Olympic investors until the end of 2015.
Mikhail Poluboyarinov, VEB first deputy chairman, said the bank was due by September 1 to submit a report to the government on the cash flow that the Olympic projects are generating. After that it is for the government to decide whether to extend the moratorium on payments or adopt other measures of state support.