EBRD strengthens capital base of Bank St. Petersburg

By Richard Wallis

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As part of the European Bank for Reconstruction and Development’s anti-crisis response, the EBRD is making available a long-term subordinated loan of $75 million to Bank St. Petersburg, the largest private bank in Russia’s second city.

This will strengthen the capital base of Bank St. Petersburg, increase its capacity to expand lending in the region and help it to support its clients through a turbulent period.

The unsecured loan will count towards Bank St. Petersburg’s Tier II capital under Russian Central Bank regulations. The terms of the 10-and-a-half-year EBRD loan call for a single repayment at maturity in 2019.

EBRD President Thomas Mirow stressed at the loan signing ceremony that the transaction sent a clear message about the EBRD’s confidence in the strategy and prospects of Bank St. Petersburg, which is now focusing on building up capital after having first taken action to cut expenses and improve asset quality in the wake of the crisis.

This loan is part of a wider anti-crisis response in support the Russian financial system under which the EBRD has committed over $350 million to Russian banks since the crisis hit the country in September 2008, including $115 million in subordinated loans, Mr. Mirow added. The loan signing took place on the sidelines of the 2009 St. Petersburg Economic Forum.

Alexander Savelyev, Chairman of Bank St. Petersburg, stressed the management was proud to cooperate with EBRD as this confirmed that Bank St. Petersburg was developing successfully and efficiently using the capital received.

This loan should be seen not only as an efficient EBRD investment but also as an important contribution to the development of the region as Bank St. Petersburg is an integral part of the economy in North-West Russia.

Bank St. Petersburg has been a client of the EBRD since 2006. Last year, the EBRD raised $100 million for the bank through a syndicated loan. Acting as lender of record for the full amount, the EBRD provided $25 million and attracted a further $75 million from a group of 14 international banks.

Three years ago, the EBRD provided it with a $30 million loan aimed at supporting small and medium-sized businesses in Russia’s North-West Federal District.

Bank St. Petersburg is also a participant in the Bank’s programme to speed up the flow of international trade under which the EBRD guarantees letters of credit issued by participating banks.

Bank St. Petersburg, established in 1990, became in 2007 the first Russian private bank to carry out an initial private offering and its shares are listed on Russia’s RTS and MICEX exchanges. Today, the Bank serves over 727,500 individuals and 35,500 corporates. Based on its 1st Quarter performance, it ranks 16th in terms of assets and 12th in terms of retail deposits among Russian banks.

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