Russia’s top 30 banks led by the country’s largest lender Sberbank and troubled Bank of Moscow aided to a $20-billion capital flow in the first half of 2011, Sergei Moiseyev, central bank deputy director for financial stability, said on Monday.
“We are noting a dual trend: on the one hand, banks are trying to find new niches and sectors where they could lend successfully under acceptable risks, [and] on the other hand, banks are becoming actively involved in capital export,” Moiseyev said at an international banking forum.
“What I mean is the top 30 (banks) helped to export about $20-billion worth of capital in the first half of the year, mostly in the form of interbank loans and loans to non-residents. This trend is causing concern.”
Analysts have said that uncertainty ahead of parliamentary elections in December and a presidential poll in March forced Russian capital to seek safe havens abroad.
Central bank statistics show that the Russian banking sector’s net export of capital amounted to $11.9 billion in January-June 2011. Banks’ foreign assets increased by $18.4 billion, while foreign liabilities rose by $6.7 billion. Total capital outflow from Russia amounted to a staggering $31.2 billion in the first half of 2011.
“Among the top banks which have increased their non-resident positions is Sberbank … , Bank of Moscow is the second … and there are a number of banks which should be asked the question of why their non-resident crediting is so heavy,” Moiseyev said.
Bank of Moscow, the capital’s investment vehicle under former mayor Yury Luzhkov, was taken over by state-run VTB bank earlier this year after President Dmitry Medvedev fired Luzhkov last fall over a lack of trust. Soon after the takeover, investigators launched a fraud and embezzlement probe into a $440-million loan by the bank that was eventually received by property developer Yelena Baturina, the wife of Luzhkov.
Moiseyev also said that local subsidiaries of foreign banks were also exporting capital to help their parent banks.
“As for foreign banks’ subsidiaries, they are now acting in fact as net borrowers on the domestic Russian market to support their parent structures,” he said.