Gref loves Turkey, Costin - Cyprus

Russian banks are holding abroad 182 billion dollars in the form of claims to foreign residents, RBC calculated on the basis of data from the Central Bank. Despite the crackdown in Cyprus, which affected Russian capital, a fifth of this money is there.
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Over 20% of the portfolio of foreign debt claims of Russian banks accounted for Cyprus residents, RBC calculated on the basis of information published by the Bank of Russia. The total claims of Russian banks to foreign residents as of October 1, 2018 amounted to 11.9 trillion rubles. ($ 182.1 billion at the rate of the Central Bank for this day). This amount corresponds to approximately 12% of Russia's estimated GDP for 2018.

RBC studied information on the debt of foreign residents to Russian banks, published quarterly as part of Form 0409805 (“Calculation of own funds (capital) and the values ​​of mandatory banking group ratios”). For the first time these data were made public as of October 1, 2017. These indicators are needed to calculate the so-called countercyclical surcharge (“countercyclical buffer” according to the Basel III standards) —the surcharge to the minimum level of capital adequacy, which depends on the corresponding values ​​of the countercyclical surcharges set by national regulators and the amounts of requirements for residents of these jurisdictions. On October 1, 2018, the Central Bank reported 72 banks submitting such statements.

The fifth part of the requirements of all banks - $ 37.8 billion - falls on Cyprus. And this amount is growing. Thus, compared with the data for April 1, the requirements of the Russian banking sector to Cyprus residents increased by 16.5%.

Why Cyprus?

In 2018, Cyprus came under serious pressure from US regulators: in the spring, after a scandal with Latvian withdrawal schemes, a delegation of the US Treasury headed by Assistant Secretary for Counter-Terrorism Marshall Billingsley came to the island. After that, the Cypriot Central Bank tightened the requirements for foreign customers of local banks. In particular, the Central Bank instructed banks to close the accounts of non-active dummy companies. Experts and consultants have perceived this primarily as an attack on Russian money, provoked by the United States. EU sanctions against Russia and tightening the screws on the part of the Cyprus Central Bank led to the closure of tens of thousands of Russian accounts on the island and the departure of many companies with Russian interests, Russian Ambassador to Cyprus Stanislav Osadchiy said in November, quoted by Cyprus Mail.

But data from the Bank of Russia shows that at least large Russian banks maintain close ties with Cyprus. “Cyprus’s leadership is quite logical, since it is one of the most popular jurisdictions among Russians. At the same time, we believe that the share of financing going to Cyprus will be reduced, since on the whole today the interaction between Russia and Cyprus is no longer as friendly as it was five years ago, ”said Alexander Bakhtin, investment strategist at BCS Premier.

“Despite the de-offshore company in Russia, Cyprus is still in the top list of Russian business to create holdings. And now the choice of Cyprus is often due not so much to tax preferences as the opportunity to use English law in structuring relationships with partners, the relatively low cost of creating and maintaining companies, and loyalty to international (including Russian) business, ”added Voronkova, a KPMG partner.

Another 15% of all foreign claims of Russian banks (1.82 trillion rubles, or $ 27.7 billion) are in Turkey, but this is an entirely individual Sberbank history. Requirements for Turkey include requirements for a subsidiary bank of Denizbank, which Sberbank credits, as well as investments in its shares, said RBC chief analyst at Sberbank, Mikhail Matovnikov. Sberbank is selling Denizbank to Emirates-based Emirates NBD Bank, and at the close of the transaction requirements will decrease, says Matovnikov.

What are these requirements?

Half of all requirements of Russian banks relate to residents of states belonging to the European Union. In addition to Cyprus, this is the Netherlands (residents of the kingdom owe Russian banks $ 9.9 billion) and Ireland ($ 8.3 billion).

Cyprus, the Netherlands, Switzerland, Ireland are offshore or quasi-offshore jurisdictions where some large Russian companies are registered. “Most of these loans are de facto residents of the Russian Federation, but at the request of the Central Bank they are taken into account according to the company's“ registration ”. Some of the requirements include requirements for banks in the respective countries, ”explains Matovnikov.

Cyprus, the Netherlands and Jersey traditionally register holding and financial companies that are controlled by Russian shareholders and are used to own and / or finance Russian assets, says Anna Voronkova. The obligations of residents of these countries are primarily not related to the provision of financing to foreign companies, but with Russian banks lending structures of large Russian enterprises abroad in order to service their business flows, confirms Alexander Bakhtin.

For other countries, the reasons, as a rule, are the same: this financing, in fact, for “our own”. “It is unlikely that Swiss enterprises are actively credited in Russian banks, it is much more profitable for them to contact their credit organizations and get much cheaper financing,” says Bakhtin. In Switzerland, there are a large number of trading companies of Russian groups for cross-border trade in oil, metals, etc., adds Voronkova.

Neighbors and Offshore

Residents of the countries of the Customs Union (first of all, Belarus and Kazakhstan) account for $ 20.3 billion - 11% of all foreign requirements of Russian banks.

Kazakhstan is the largest jurisdiction in terms of the amount of foreign claims for Alfa Bank: 77.7 billion rubles, or 17.4% of all foreign claims of this bank. Form 805 is compiled at a consolidated level and includes the results of activities of subsidiaries (Alfa-Bank Kazakhstan, Amsterdam Trade Bank, Baltic Bank, etc.), therefore the total amount included the own requirements of subsidiaries, in particular the requirements “ Alfa-Bank Kazakhstan "to residents of Kazakhstan, explained RBC press service of Alfa-Bank.

Another 10% falls to offshore jurisdictions. The Ministry of Finance of Russia calls 44 jurisdictions offshore, in 27 of them are Russian bank money. The biggest demands - $ 14.8 billion - Russian banks impose on Jersey residents. Sberbank has the most requirements for Jersey residents - $ 12.8 billion. Sberbank has, for example, a $ 4 billion loan from the Rusal aluminum company registered in Jersey, which is on the US sanctions list, but will soon have to leave it.

Dramatically reduced the requirements of Russian banks to Ukrainian residents. If on July 1, 2018, they amounted to 560.8 billion rubles. (as of April 1 - 276.1 billion rubles), then as of October 1, they decreased several times - to 131.8 billion rubles. In particular, at VTB they decreased four and a half times (to 32.4 billion rubles), while for Sberbank they decreased five times to 78.6 billion rubles. Back in 2017, Ukraine imposed sanctions against Russian state-owned banks, they are trying to curtail their activities there, minimizing losses (some assets are simply written off). In addition, this year, the Ukrainian courts began to arrest the local assets of Russian state-owned banks as part of the enforcement of the decisions of the Hague international arbitration on the Crimea.

As we thought

To analyze the requirements of Russian banks for foreign residents, RBC used the form 0409805. The amounts of claims in the form of the Central Bank are in rubles, and the Central Bank rates that were relevant for the relevant date were used to convert to US dollars. Offshore companies were understood as all states and territories from the annex to the order of the Ministry of Finance of November 13, 2007.