28 Apr 2010 16:39

Gazprombank won

MOSCOW. April 28 (Interfax) - Gazprombank does not plan early repayment of subordinated loans from Vnesheconombank (VEB), Gazprombank CEO Andrei Akimov told journalists.

The loans boosted bank capital, allowing it to increase lending, Akimov said. Although the loans are fairly expensive, the bank does not want to repay them early, since that would reduce capital and reduce opportunities for lending, he said.

"We already have set standards. We can lend a borrower a certain percentage of capital. It [a subordinated loan] raises our capital base," he said.

The bank has asked the government to consider cutting the interest rate on the subordinated loans, he said. "We wrote letters about how the rates do not conform to the market, that we would like to ask the government to lower the rates. But unfortunately, nothing has come of it so far," he said.

Gazprombank would like to have the interest rate tied to LIBOR. "We would like to make it floating, so that it's no higher than 6%; that's LIBOR+3.5%-4%," he said.

In addition, Gazprombank is considering a supplementary share issue, so that shareholders convert their portion of the subordinated loans into shares. Talks with shareholders on the matter are underway, he said.

The bank might even conduct an IPO, although the market is not favorable at the moment. "An IPO is somewhere near the bottom of our list of potential measures to raise capital," Akimov said.

Last week Deputy Prime Minister and Finance Minister Alexei Kudrin said that the government would not lower the rate VEB pays on the deposit that provided the money for the subordinated loans. That has ended talk of reducing the interest rate on the subordinated loans for the time being.

However, the Finance Ministry and the Central Bank will allow the banks to return the subordinated loans early.

State Duma deputies had previously proposed cutting the loan interest rates, by 1.75 percentage points for loans originally issued at 8% and by 2.25 p.p. for loans issued at 9.5%.

Gazprombank was the third biggest Russian bank by assets according to the Interfax-100 list as of the end of 2009. Lider, which manages the Gazfond non-governmental pension fund, owns 8.5% of shares outright and controls another 34.3% via Gazkon and Gaz-Servis. Gazfond itself owns 7.1% of bank shares and Gazprombank's Novfintex has 5.8%.