Supervisory Board of Vnesheconombank Approves Alfa-Bank Russia's Subordinated Loan
01 Sep 2009
Vnesheconombank’s (VEB) Supervisory Board has approved Alfa-Bank Russia's application for a subordinated loan of 29.9 bln rubles. The proceeds will be used to extend loans to Russia’s industrial companies.
The loan matures in December 2020 and the interest rate is set at 9.5% per annum, with the proceeds of which used in the calculation of Alfa-Bank Russia's equity.
Alfa-Bank Russia was the first private Russian bank to receive approval for this kind of state support. The loan’s extension will be based on new terms, meaning that Vnesheconombank will be lending to the Bank at an amount three times higher than the subordinated loans provided by the Bank’s shareholders. In June 2009, Alfa-Bank Russia's shareholders extended a US $320 mln subordinated loan to the Bank, having increased its equity capital correspondingly.
Andrei Sokolov, Alfa-Bank Russia's first deputy Chairman of the Executive Board said, "The funds obtained from Vnesheconombank will be used to provide loans to Russia’s industrial companies. Alfa-Bank Russia's customers include key domestic industrial companies, and the Bank’s corporate portfolio amounts to almost 400 bln rubles. The new subordinated loan will make it possible for Alfa-Bank Russia to increase its lending to the real sector of the Russian economy."
We note that on January 30 this year, Alfa-Bank Russia, along with other private Russian banks, received a 10.2 bln ruble subordinated loan from Vnesheconombank.
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