The Government made a decision to comply with a request of RusAg`s CEO Dmitry Patrushev to exclude the Bank from the privatization program. It will be retained under 100% state control to continue providing effective support to the national agribusiness. However, in the near future the company will hardly gain a desired status of state-run corporation which would give it more freedom in actions with no obligations to comply with the Central Bank`s norms and requirements.
According to the information available to «Ъ», the Government came to the decision with respect to the future of Russian Agricultural Bank (100% state-owned) and adopted a resolution to exclude the company from the privatization program. “A decision has been taken that Russian Agricultural Bank is not subject to privatization and will be retained under governmental control”, stated Russia`s Agriculture Minister Nikolay Fedorov. Earlier, the Government announced the plans to sell a minor stake in the Bank in 2013 and privatize 25% minus 1 share by 2015. According to «Ъ» sources, the program will be revised as soon as in June, 2013.
In April, Chairman of the Board of RusAg Dmitry Patrushev addressed President Vladimir Putin with a letter to draw his attention that the Bank`s privatization would endanger implementation of the State Program on Agribusiness Development and national food security as new shareholders would be focused on profits and push for higher rates which would deteriorate loans conditions for agribusiness (see «Ъ» issue dated April, 9). As President`s press secretary Dmitry Peskov noted that time, the letter had been directed to the Government to make a final decision on the issue.
As follows from the Agriculture Minister`s reply, the Government satisfied the request but not completely. Besides the removal from the privatization list Mr. Patrushev asked the President to grant the Bank a status of state-run corporation which would enable it to support the national agribusiness more actively without being afraid to breach any of the Central Bank`s norms and regulations. The Ministry of Agriculture officials declined to comment on whether this request would be met.
The decision of the Government to remove RusAg from the privatization program was expected for market analysts: the Bank does not bear any interest for investors. “Presently it`d be very hard to sell RusAg – it is socially oriented, has a weak loan portfolio quality and low profits”, notes Moody`s credit analyst Eugene Tarzimanov, - “Currently it is possible to sell a stake in the Bank only by offering a big discount which doesn`t look interesting for the Government”. According to RusAg`s reporting as of April, 1, the share of NPLs in its corporate portfolio (accounts for more than 80% of the total loan portfolio) stood at 12.5% (RUB 113,5 billion), while the average level in the Russia`s banking system according to the Central Bank data is 4,6%. RusAg is the fourth largest Bank by assets but its financial result (RUB 2.18 in 2012 according to the CB data) is 10 times lower than VTB`s (RUB 21.6 billion), which ranks number 4 among top-5 most profitable banks