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Russian Banks Shrug Off U.S. Sanctions, For Now

Published: July 18, 2014 (Issue # 1820)



  • Gazprombank is now barred from medium and long-term dollar financing.
    Photo: Denis Grishkin / Vedomosti

The two major Russian state-controlled banks hit with U.S. sanctions will be able to shrug off the measures, which fall far short of sector-wide sanctions, analysts said Thursday.

However, the new wave of sanctions will likely raise the cost of borrowing and slam the door on Russian banks' access to international loans, just as the market was beginning to revive.

The measures taken by the U.S. on Wednesday bar two of Russia's largest banks, Gazprombank and Vneshekonombank, or VEB, from access to medium- and long-term dollar financing, which the U.S. says will "impose additional significant costs on the Russian government for its continued activities in Ukraine."

On the face of it, the new measures amount to massive escalation. Previous rounds of sanctions hit relative banking minnows, while VEB and Gazprombank are two of the country's largest lenders. Gazprombank, Russia's No. 3 bank, has assets worth some 4 trillion rubles ($116 billon). VEB, though not strictly speaking a bank but a government-controlled corporation, is the state's preferred tool for funding infrastructure projects and propping up industry and small business. It aims to grow its loan portfolio to 850 billion ($25 billion) by the end of this year.

Yanking the carpet from under these lenders would send Russia's economy spinning, but the new sanctions do no such thing, analysts said.

Earlier sanctions against SMP Bank and Bank Rossiya, whose owners were accused by the U.S. of being members of President Vladimir Putin's inner circle, effectively ejected them from the financial world beyond Russia's borders. Western companies were barred from dealing with them, and U.S.-based payment systems Visa and MasterCard stopped servicing them.

Wednesday's sanctions, however, target only financing for periods of more than 90 days, and even that restriction will be easy to outmaneuver with the help of canny financial advisers, according to Maxim Osadchy, head of analysis at Moscow-based Corporate Finance Bank.

Visa and MasterCard, meanwhile, announced Thursday that they would continue to service the two banks.

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ALL ABOUT TOWN

Wednesday, Jan. 28



Feel like becoming a publishing mogul? Stop by the Freedom anti-cafe at 7 Ulitsa Kazanskaya today at 8 p.m. where Simferopol, Crimea-based founder and chief editor of the Holst online magazine will talk about creating an internet magaine, including what stories to cover, how find an audience and build a team, where to find inspiration and how to stand out from the crowd. Admission is the normal price of the anti-café — 2 rubles per minute, which includes tea and snacks.



Learn everything you always wanted to know about wine, and perhaps a bit more, at the Le Nez du Vin seminar for wine lovers. Held at the WineJet Sommelier School, 100 Bolshoy Prospekt Petrograd Side, at 7:30 p.m., the event will cover wine production, the basics of wine tasting, the concept of terroir and the various countries where wine is produced. Tickets are 750 rubles and include a wine tasting. Register by calling +7 921 744 6264.



Thursday, Jan. 29



Attend a master class on how to deal with complicated business negotiations today at the International Banking Institute, 6 Malaya Sadovaya Ulitsa. Running from 3 to 6 p.m., Vadim Sokolov, an assistant professor at the St. Petersburg State University of Economics, will introduce aspects of managing the negotiation process and increasing its effectiveness. Attendance is free with pre-registration by telephone on 909 3056 or online at www.ibispb.ru



Celebrate what would be writer Anton Chekhov's 155th birthday at the Bokvoed bookshop at 46 Nevsky Prospekt. Starting at 5 p.m., the legendary author will be feted with readings of his stories and short performances based on his plays by various St. Petersburg actors. Chekhov's books will also be offered at a 15% discount during the event.



Friday, Jan. 30



The Lermontov Central Library, 19 Liteyny Prospekt, will screen 'Almost Famous’ in English with Russian subtitles at 6:30 p.m. Cameron Crowe's Academy Award-winning comedy from 2000 stars Billy Crudup, Kate Hudson, and Patrick Fugit, and tells the story of a budding music journalist at Rolling Stone magazine in the 1970s. Admission is free.



Meet renowned Russian poet, journalist and writer Dmitry Bykov, famous for his biographies of Boris Pasternak, Bulat Okudzhava and Maxim Gorky, and winner of 2006 National Bestseller Award. Bykov will read old and new poems as well as answer questions about his works at the St. Petersburg Philharmonic, Main Hall, at 7 p.m. Tickets start at 1,000 rubles and are available at city ticket offices and the from the Philharmonic website www.philharmonia.spb.ru.



A retrospective of the films of Roman Polanski starts today at Loft-Project Etagi, 74 Ligovsky Prospekt, with a screening of ‘Repulsion’ at 7 p.m. and ‘Rosemary’s Baby’ at 9:15 p.m. The series runs through Feb. 4 and will include Polanski's eminently creepy ‘The Tenant,’ the cult comedy ‘The Fearless Vampire Killers’ and ‘Cul-de-sac’ among others. Tickets are 150-200 rubles and the complete schedule is available at www.vk.com/artpokaz/



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