A recently established British fund will help Russian second-tier banks beef up their capital and stay afloat amid deteriorating external and internal financial conditions, Kommersant business daily reported on Monday.
“The Russian Banks Capitalization Fund was registered in mid-June in England and is ready to accept applications from Russian banks,” IFC Senior Investment Officer for Central and Eastern Europe Greg Alton said last week at a roundtable discussion on banks’ capitalization organized by the Russian Union of Industrialists and Entrepreneurs.
Alton said the Fund currently had $275 million at its disposal, with $125 million contributed by the IFC and Vnesheconombank (VEB) each, and the remaining $25 million by the Finance Ministry of Russia.
“This is the first financing tranche,” Alton said, adding the amount would be doubled by the end of the year.
The VEB press office confirmed the transfer of funds.
So far, about a dozen second-tier banks from the list of the top 100 banks will be able to get financing. The Fund’s share in the capital of banks will be capped at 20-25 percent, Alton said, adding the IFC expected to get yields of 15 percent per annum from its investment.