ANNOUNCEMENT 22 Aug 2014In August 2014, the government of the Russian Federation announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
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With Decree Nr. 839, dated August 22, 2014, was approved a measure where the stated purpose is to enhance the stability of the domestic banking system. The recipients of state provided financial support are the 'Russian Agricultural Bank', a 100% state-owned bank, and'VTB Bank' which the state owns 60.93% of.
The details of the financial support are:
This state intervention increases the tier 1 capital of both banks. It avoids a decapitalisation which would have happened if the Russian Government has not undertaken the intervention with the preference shares, under which scenario the subordinated debt would have been gradually amortised from the banks' regulatory capital.
The GTA includes state guarantees and other financial incentives thatare likely to affect the restructuring and performance of firms facinginternational competition, whether from imports, in export markets, andfrom foreign subsidiaries.