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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, Oct. 1


The St. Petersburg International Innovation Forum 2014 kicks off today at Lenexpo, where it will be presenting the latest and greatest ideas until Oct. 3. Focusing on economic development and the decisions and measures necessary to encourage development in Russias most important industries, the event is a possibility to discuss the innovations currently available in a variety of fields.


Representatives of the Russian and international media industries arrive in St. Petersburg for the first ever International Media Forum being hosted by the city until Oct. 10. With a variety of events on tap, including workshops, lectures and film screenings, the event plans to reemphasize the citys reputation as the countrys culture capital and as an emerging market and location for the visual arts.



Thursday, Oct. 2


The celebration of the bicentennial of the birth of Mikhail Lermontov continues with todays free exhibition in the citys Lermontov Library at 19 Liteiny Prospekt. Titled Under the Rustling Wings, the temporary exhibition will feature the costumes and scenery used in the 1917 production of Lermontovs play The Masquerade, which he wrote in 1835 when he was only 21 years old.



Friday, Oct. 3


Learn more about how to manage and evaluate employee performance during SPIBAs Human Resources Committee meeting this morning on Employee Assessment: Global and Local Trends. Starting at 9:30 a.m., the discussion will touch on such topics as the partnership between HR and business, reliable assessment strategies and more, with Tatiana Andrianova, the head of the SHL Russia and CIS branch in St. Petersburg, as the featured guest. Confirm your participation by Oct. 2 by emailing office@spiba.ru or calling 325 9091.


AmChams Procurement Committee Meeting is at 9 a.m. this morning in their office in the New St. Isaac Office Center on Ulitsa Yakubovicha.



Saturday, Oct. 4


Wine and cheese lovers will get their chance to revel during Scandinavia Country Club and Spas Wine Market Weekend. Going on today and tomorrow, wining diners can listen to live music, take part in culinary classes and, of course, sample a variety of fine wines from around the world. The cost of admission is 400 rubles ($10.30) for adults and 200 rubles ($5.15) for children.



Sunday, Oct. 5


Look for the latest fall fashions at the Autumn Market today in Freedom Anticafe at 7 Kazanskaya Ulitsa. The minimarket plans to offer clothes more flattering than the puffy jackets that are a staple of the citys cold-weather fashion, while offering the same amount of protection from the biting winds blowing off of the Baltic.



Monday, Oct. 6


SKA St. Petersburg, the citys KHL affiliate, welcomes Slovakian club HC Slovan in a match-up tonight at the Ice Palace near the Prospekt Bolshevikov metro station. The puck drops at 7:30 p.m. and tickets can be purchased on the clubs website or in person at either the arenas box office or the clubs merchandise store on Nevsky Prospekt.



Tuesday, Oct. 7


Learn more about Russias energy industry at the St. Petersburg Energy Forum that begins today and runs through Oct. 10. Attracting industry experts and political and business representatives, the forum plans to welcome more than 350 plus companies and their representatives to discuss the future of Russias largest economic sector.



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