MOSCOW, March 23 Russia's central bank is
preparing to give state banks a three-year extension to set
aside provisions needed to cover for potential losses after a
new round of sanctions by Ukraine, a source close to the central
bank told Reuters on Thursday.
Last week, Kiev announced new sanctions on the Ukrainian
subsidiaries of Russian state-owned banks, banning the banks
from taking money out of Ukraine. The sanctions come into effect
The new sanctions will hit the capital of the banks
operating in Ukraine as they will need to set aside provisions
to cover for potential losses.
An extension would help the lenders to preserve capital and
maintain banks' financial stability.
The source said the Russian central bank governor had not
yet signed the order. The central bank did not immediately reply
to a request for a comment.
Five Russian state-owned banks are present in Ukraine with a
combined market share of 8.6 percent and liabilities of 36
billion hryvnia ($1.3 billion).
Sberbank, VEB and VTB are among the top
20 largest lenders. Sberbank and VTB have both said they are
looking at options to leave Ukraine.
The banks have already been banned from increasing their
assets and deposits following a breakdown in relations between
Ukraine and Russia in 2014 due to Moscow's annexation of Crimea
and support for pro-Russian separatists.
(Reporting by Oksana Kobzeva; additional reporting by Kira
Zavyalova; Writing by Katya Golubkova; Editing by Gareth Jones)