OREANDA-NEWS. March 22, 2010. Sberbank is ready to repay a RUB 500 billion subordinated loan to Bank of Russia ahead of time if the CBR agrees to lower the loan interest rate from the current 8%, Sberbank president, German Gref said on March 22. Gref added that Sberbank now has access to cheaper credit resources. He added that the company was not to hold any additional share issues in 2010.

The early repayment of RUB 500 billion could help Sberbank reduce its resource costs, which in turn should lower pressure in interest margin. At the same time, the eventuality could have a grave downward impact on Sberbank capital adequacy: in line with our estimates, after the loan repayment, its capital adequacy ratio may fall from 21.6% to 13.4%. Given the bank’s intention to enlarge lending volumes, the premature repayment of its debt to CBR could force it attract additional capital in the coming years. In view of the role Sberbank plays in the Russian banking industry, we believe the CBR will agree to lower the interest on the loan, so that Sberbank could lower its own lending rates.