11 Jun 2009 15:35

IFC rounding off talks on recapitalization of regional Russian banks

MOSCOW. June 11 (Interfax) - The International Finance Corporation (IFC) is rounding off talks with the Russian government on involvement in the recapitalization of a number of regional banks, Timothy Krause, head of the IFC's Financial Markets in Central and Eastern Europe Division, told Interfax.

"Talks with the government are in the final stage. We're already discussing the details," Krause said.

The IFC is creating a special fund to recapitalize banks. Krause said the fund could contain $1 billion, of which the IFC would provide $200 million. He said a lot of requests have already come in from Russian banks.

"These are mainly small banks on a national scale, but leaders in their own regions," Krause said.

The IFC is willing to commit funding to banks in which it is not currently a shareholder, he said.

Krause said it was too soon to disclose what proportion of funding the government will provide and what proportion the IFC will provide. But he did say funds would probably be invested over a period of two or three years and that the IFC would pull out of projects over a period of three-to-five years.

Earlier reports said the IFC's plans to recapitalize Russian banks were contingent on the government's participation.