Euroclear earns 734 mln euros in interest on frozen Russian assets in Q1

MOSCOW. April 28 (Interfax) - Euroclear earned 734 million euros in interest income on investment of blocked Russian assets in the first quarter of 2023, the international depository reported.

This figure totalled 821 million euros last year, including 110 million euros in the first half of 2022.

Euroclear said its board expects interest income to continue to grow as blocked payments and redemptions continue to accumulate, albeit at a slower pace during 2023.

Euroclear also "notes that analysis is being undertaken by the European Commission to consider the potential generation of resources to support Ukraine from reinvestment of immobilised Russian assets."

Euroclear also reaffirmed that it would not distribute any profits related to the frozen Russian assets until the situation becomes clearer.

Relations between European central depositories Euroclear and Clearstream and Russia's National Settlement Depository (NSD) were essentially cut off almost immediately after the start of the military operation in Ukraine last year. At the time, Russia, responding to tough sanctions, imposed currency and capital restrictions, while the European settlement and clearing systems closed ruble "bridges" and the option of settlements in rubles. The NSD, a division of the Moscow Exchange Group, imposed restrictions on transactions on Euroclear and Clearstream accounts at the beginning of March 2022 on the recommendation of the Central Bank of Russia (CBR).

At the beginning of June 2022, the European Union imposed sanctions on the NSD, leading to its accounts being blocked at Euroclear and Clearstream. Russian investors had about 5.7 trillion rubles in assets blocked in foreign infrastructure as of the end of November, the CBR estimated.

The European Commission issued clarifications in early October under which the authorities of some EU members could allow transactions necessary to close contracts and agreements entered into prior to the imposition of sanctions against the NSD on June 3 until January 7, 2023. Russian market participants filed requests for general licenses from the finance ministries of Belgium and Luxembourg to unblock the assets of all investors not subject to sanctions, but there have still not been any reports about the approval of any major request.