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Putin holding a meeting with Gref late Monday at the prime minister’s Novo-Ogaryovo residence outside Moscow.
Sberbank will resume lending to households in foreign currencies next week as devaluation risks retreat, chief executive German Gref said late Monday.
Sberbank halted foreign-currency retail lending last year as the ruble began its 35 percent plunge against the dollar from August through January, after the price of oil tumbled and investors fled ruble assets because of the deepening global economic turmoil.
“The situation has stabilized significantly,” Gref said at a meeting with Prime Minister Vladimir Putin. “The risk of devaluation has fallen substantially, and we decided to resume all types of dollar loans to individuals, with the exception of mortgages,” he said in comments posted on the government’s web site.
The currency of the world’s biggest energy producer may fall to 37 rubles to the dollar by the end of the year as the government prints rubles to cover a budget deficit that may reach 10 percent of gross domestic product, Natalya Orlova, chief economist at Alfa Bank in Moscow, said by telephone Tuesday.
“We know that the situation in the currency market can change quickly,” Orlova said. “We aren’t talking about large volumes of loans. This is a small, positive sign.”
The volume of ’s retail loans slid 6.7 percent from the start of the year to 1.17 trillion rubles ($37 billion), the bank said Monday.
Overdue debt reached 3.2 percent of total loans in July, compared with 2.8 percent in the previous month, and the bank spent 218 billion rubles building reserves, compared with 27.6 billion rubles in the year-earlier period. That pushed net income calculated to Russian accounting standards down 92 percent to 6.8 billion rubles in the first seven months.
Putin said last month that Sberbank, which holds 50 percent of the country’s retail deposits, bears a “huge responsibility” to lend and help stimulate the economy after it contracted at a record pace in the first half of the year.
Gref also said Sberbank would lend out as much as 20 billion rubles in September to help resume work at the Sayano-Shushenskaya hydroelectric station.
“We are ready to sign an agreement in August to start lending 20 billion rubles on very favorable terms, and before the end of the year we will be ready to open a credit line of about 10 billion rubles,” he said.
RusHydro’s largest plant was knocked completely off line when an engine room flooded early Aug. 17, and officials have said it could take at least five months before Sayano-Shushenskaya is even partly operational.
The facility accounts for some 2.5 percent of the country’s overall power capacity.
The bank will also pay off the mortgages of 26 people who died in the accident, he said.
(Bloomberg, MT)
