Russian cbank sees challenges for VEB’s strategy until 2021

MOSCOW, Nov 28 (PRIME) -- The 2021 development strategy may become a challenge for Russian state development bank Vnesheconombank (VEB), including difficulties with local financing, new spheres of investment, and a burden on capital, the central bank said on Tuesday in a financial stability report.

VEB’s securities will have to compete for funds of institutional investors with OFZ federal bonds, mortgage securities of the Agency for Housing Mortgage Lending (AIZhK), and liquid securities of largest issuers, which creates prerequisites for wider spreads on the securities market, the central bank said.

The next challenge is focus on new spheres of investment, including infrastructure, industry, a switch of the defense companies to the civil sector, hi-tech, and exports.

“The highly risky directions of activity mean increased requirements for the risk management system of the group, including requirements for the level of project expertise and existence of integrated risk-management, or analysis of risks of the group on a consolidated basis,” the regulator said.

The burden on VEB’s capital will persist in the mid-term if the bank fails to sell subsidiaries Globexbank and Sviaz-Bank, which the bank is bailing out, the authority added.

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