RIA NOVOSTI. A draft law submitted to the State Duma suggests that the interest rate on subordinated loans provided to Sberbank should be lowered to 4.75% from 8%. As RIA Novosti wired, this was mentioned in a draft law of the Duma’s Committee for the Financial Market, whose chairman Vladislav Reznik submitted the document to the parliament for review.
For the record, the Rub 500 bln 10-year subordinated loan was extended at 8% to Sberbank by the Bank of Russia, its major shareholder, at the end of 2008 in accordance with the Federal Law “On Taking Additional Measures to Support the Financial System of the Russian Federation”.
“Since mid-2009 the environment on the money and lending markets has changed substantially and is presently marked by low interest rates in the economy. Setting the 4.75% rate will correspond to the market average rate with the aim to maintain liquidity in the national banking system and also reduce lending rates in the Russian economy," Reznik commented on the draft law.
According to him, since the middle of 2009 first-class borrowers, with Sberbank being one of them, have been able to draw funds on external markets. In addition, the cost of these resources ranges from 4.25% to 5.25%. “At the same time Sberbank’s repayment of the subordinated loan and attraction of money from foreign markets will increase the Russian economy’s reliance on external markets, and also make the national financial system more vulnerable," the committee noted in a statement.
Sberbank representatives admitted many times that CBR’s subordinated loan, taken in the height of the crisis, is the most expensive liability of the Russian largest lender and did not rule out seeing it repaid ahead of schedule.
