Loans change currency - Newspaper Kommersant No. 164 (7365) dated 09/07/2022
Sberbank, VTB, Alfa-Bank, Gazprombank (GPB) and Sovcombank have started or are preparing to provide loans to corporate clients in yuan. The potential for replacing the corporate loan portfolio in yuan and other currencies of friendly countries may reach the equivalent of $50-80 billion in the coming years. Some players plan to expand the list of currencies by adding Indian rupees, Brazilian reals and UAE dirhams to it.
During the Eastern Economic Forum (EEF), Sberbank and VTB announced the launch of lending to legal entities in Chinese yuan.
According to the first vice chairman of the board Sberbank Alexandra Vedyakhin, they are already starting to issue loans in yuan and see “very high demand”.
at VTB promise to start lending "in the currencies of friendly countries" before the end of the year. “We now have 11 projects worth the equivalent of about 450 billion rubles, mostly in yuan,” said Andrey Kostin, head of VTB. The VTB press service clarified that loans will be issued at market rates - for each borrower, the rate is determined individually and depends on many parameters, such as credit quality, term and other parameters of the transaction. On average, the rates on such loans are comparable to loans in dollars and euros.
Do not lag behind the largest players and competitors from among the top 10. So, in Alfa-bank clarified that lending in yuan has already been launched, money is being issued: “The intensity of lending depends on the speed of the transition to settlements in yuan and the transfer of client foreign trade contracts to yuan. We see a partial replacement of dollar and euro portfolios by yuan.”
“Demand for lending in yuan is mainly due to the transformation of the revenue structure of exporters and the change in the currency of settlements under import contracts,” said Deputy Chairman of the Board Sovcombank Mikhail Avtukhov. — The Bank already finances clients in yuan through the purchase of debt instruments… Some of the existing credit lines provide for the yuan as a funding currency.” RMB lending will complement the loan product offer and Gazprombankassured the first vice-president Oksana Panchenko.
The volume of the foreign currency corporate loan portfolio of banks has been decreasing for the fifth month in a row and, as of July, is about $150 billion, Dmitry Orekhov, Managing Director of the NKR, notes:
“Given the refusal of banks to lend in dollars and euros, as well as Russia’s global turn to the East, there is a potential to replace the corporate loan portfolio mainly in yuan to the equivalent of $50-80 billion over the coming years.”
According to Mikhail Avtukhov, such loans are of interest to exporting companies from Russia and the CIS and importers purchasing products from China: “The first is because, due to changes in the currency structure of revenue, they are forced to change the currency structure of borrowings. The second is to reduce transaction risks.” In addition, according to these currencies, there are low risks of blocking, freezing, and so on, says Natalya Tabolina, manager of the management consulting department at DRT.
According to experts, the number of banks offering loans in yuan will grow, but primarily due to large players. “We should expect the launch of loans in the currencies of friendly countries from banks that can afford, within the framework of liquidity, to provide a fairly open currency position,” Ms. Tabolina believes. Chinese, Indian banks), so the expansion will not be as fast as we would like.”
For the diversification of the product line of banks, this will be a plus, which may stimulate similar proposals from competing banks, says Anatoly Perfilyev, junior director for banking ratings at Expert RA.
Although experts do not see significant potential demand for loans in currencies of friendly countries other than the yuan, there are banks that are ready to take a step further. Thus, Sberbank is working on providing loans in Indian rupees, but so far does not see enough active demand. Sovcombank is considering options for lending in Brazilian real and UAE dirhams.
