ST. PETERSBURG, May 22 (RIA Novosti) – Russian authorities are considering increasing the capital of Russian banks by up to $7.7 billion due to difficulties of financial borrowing in international markets originating from geopolitical factors, Economic Development Minister Alexei Ulyukayev said.
"The Russian banks’ growing demand for credit resources must be accompanied by an increase in their capitalization,” the minister said.
“We are considering the parameters of an increase in capitalization of Russian banks through the transformation of the subordinated loans, which were issued previously, to the Tier I capital, and the ability to increase the banks’ capital through the possibility of issuing special state securities that may be included in the capital of the banks,” he added.
The amount will depend on the rate of growth of the loan portfolio, Ulyukaev explained.
"We expect that the total sum could reach 200-300 billion rubles [$5.7-$7.7 billion], but that is in different forms," the minister told journalists on the sidelines of the St. Petersburg International Economic Forum (SPIEF).
Ulyukayev earlier said that the demand for credit resources is linked to the restrictions on refinancing external debt, which Russian companies are now facing both in the credit market and in the Eurobond market.
