Russia's Sberbank can raise 600 bln rbls in subordinated cenbank loan - CEO
(Adds details, background)
By Oksana Kobzeva
MOSCOW, Jan 14 (Reuters) - Sberbank, Russia's top lender, can raise 600 billion roubles ($9 billion) in a subordinated loan from the central bank but no decision has been taken yet on the timing of such a move, Chief Executive Officer German Gref said.
Sberbank, like its closest peer VTB and several other large Russian banks, has been hit by Western sanctions which limit its ability to borrow abroad and is struggling as the Russian economy heads for recession this year.
"We don't need it as capital support for now but there are liquidity issues as central bank funding is very expensive now," Gref told Reuters.
In a move to support the rouble, the central bank raised its key interest rate by 650 basis points to 17 percent last month. The central bank is a majority shareholder in Sberbank, Russia's largest bank by assets and retail deposits.
Late last year, the government boosted the capital of VTB by 100 billion roubles and bought 40 billion roubles' worth of preference shares in Gazprombank.
The banking sector is set to receive an additional capital boost of up to 1 trillion roubles this year as a part of a wider move to support the financial system which is also suffering after people started withdrawing deposits.
Gref, a former Economy Minister and among those calling for a shift in the Russian economy to reduce its dependency on oil prices, also said if oil stayed in the range of $45 per barrel, domestic banks would need to set aside around 3 trillion roubles in loan loss provisions this year.
Russia's total banking assets stood at 71 trillion roubles at the start of December, according to central bank data.
The rouble weakened further on Wednesday, trading at around 66 roubles against the U.S. dollar, making it harder for banks and companies to repay external debt.
The World Bank expects Russia's economy to contract by 2.9 percent in 2015, dragged down by Western sanctions imposed on Moscow over its role in the Ukraine crisis and lower oil prices. ($1 = 65.8550 roubles) (Reporting by Oksana Kobzeva, writing by Katya Golubkova, editing by Elizabeth Piper)
