21 March 2014, News Wires – Russian President Vladimir Putin pledged his support on Friday for Bank Rossiya, a lender hit by U.S. sanctions which mainly serves clients in Russia’s energy sector including businesses owned by state-run gas producer Gazprom.
The bank and its biggest shareholder Yuri Kovalchuk were included in a new wave of punitive measures by Washington targeted at Putin’s close allies over the crisis in Ukraine. Gennady Timchenko, who also made a list of 20 new names hit by the U.S. sanctions, is another shareholder in the bank.
He is also one of the founders of Gunvor, one of the world’s largest independent commodity trading companies. Kovalchuk holds a 40.3 percent stake in Bank Rossiya, while Timchenko has 7.9 percent, according to regulatory filings.
The bank, according to its latest financial report, for 2012, served 24,000 corporate clients, mainly in the oil and gas sector. Those included a significant portion of Gazprom’s businesses, primarily through Gazprom Mezhregiongaz and Gazprom Energy Holding.
“Our companies will continue using the services of the bank,” a spokeswoman for Gazprom Mezhregiongaz said on Friday. Visa Inc and MasterCard Inc have stopped providing services for payment transactions for clients at the lender and its subsidiary Sobinbank following the sanctions.
Putin, mocking the measures by Washington, instructed the Russian central bank to aid Bank Rossiya, if needed. “And as for the financial institution (Bank Rossiya): as I understand it is a medium-sized bank,” he told a meeting of Russia’s Security Council.
“I personally don’t have an account there, but I certainly will open one on Monday.” Later he said he would transfer his wages to the bank. The Russian central bank said the measures imposed by the United States would have no significant impact on the financial stability of Bank Rossiya.
“If necessary, appropriate measures will be taken in support of the credit institution and reliable protection of the interests of its depositors and creditors,” it said in a statement.
St Petersburg-based Bank Rossiya, the country’s 15th largest in terms of assets, is chaired by Kovalchuk, a close adviser to the president. The friendship between the two men dates back to the early 1990s.
According to the bank’s most recent balance sheet sent to the central bank, its assets grew by an annual 33 percent as of Oct. 1, 2013 to 401.7 billion roubles ($11.10 billion). The bank’s corporate resources base grew by 40 percent during that time to 327.9 billion roubles.