Sberbank opens correspondent accounts in Brazil in yuan
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As part of restoring the system of international payments violated by sanctions, Sberbank agreed on correspondent relations with credit institutions in Latin America. In particular, we are talking about correspondent accounts in yuan in Brazilian banks. Direct correspondent relations will allow optimizing the cost of servicing payments against the backdrop of growing foreign trade transactions between countries, Kommersant sources believe.
Sberbank has agreed with credit institutions from Brazil to open correspondent accounts in Chinese yuan, Brazilian Report reported on October 3. According to him, in July, representatives of the Russian state bank held a meeting with the management of leading state banks in Brazil. Among them, writes Brazilian Report, were representatives of large federal banks: Banco de Brasil and Caixa. Sberbank did not answer Kommersant’s questions.
After leaving the European market and breaking correspondent relations in dollars, euros and other “unfriendly” currencies, Sberbank is actively working on launching new currencies for settlements. By the end of the year, he plans to open a branch in China, and in the near future launch ruble transfers to individuals in the country to cards of local banks.
Not only the largest state-owned bank has correspondent relations with Brazilian banks, Kommersant’s interlocutors in the financial market clarify. At the same time, one of them believes that the example of Sberbank “can be considered a successful precedent.” “Not all banks in third countries are ready to open correspondent accounts in yuan and prefer dollars and euros,” explains the banker. “Now the yuan often acts as a substitute for the dollar, but not everyone has a trade turnover with Chinese companies to utilize the yuan.” “It is possible that in the case of Sberbank a special political decision was made,” says one of Kommersant’s interlocutors.
Foreign economic activity between Russia and Brazil is expanding, this requires operations to service settlements, Kommersant’s interlocutors in the market note.
In particular, in August, the Rio Times, citing estimates from the analytical company Kpler, reported that supplies of Russian refined petroleum products to Brazil could increase by 25% compared to July and reach 235 thousand barrels per day, which would make Russia the largest supplier of petroleum products to Brazil instead of the United States.
In September, for the first time since 1999, according to its statistics service, the country purchased a batch of natural and enriched uranium for $72 million. Based on the results of seven months of 2023, Russia also entered the top five grain suppliers to Brazil for the first time. At the same time, the Brazilian real, unlike the yuan, is a less popular currency in the world.
For Sberbank, opening correspondent accounts will make the service process cheaper than if operations were carried out by conversion or through an intermediary bank. In addition, the bank can diversify its balances in Chinese currency by redistributing them partially from Chinese banks to Brazilian ones.
“It is very difficult for Sberbank, as a bank under sanctions, to make yuan payments in Chinese banks. Chinese banks don’t really want to get involved with sanctioned banks,” notes Dmitry Kurbatsky, managing partner of the Dmitry Donskoy Financial Group. The Brazilian bank, according to him, will be able to act as a so-called bridge bank when making payments, which will allow Sberbank, in turn, to carry out part of the yuan payments through Brazil.
“Most likely, other banks will try to repeat Sberbank’s scheme,” believes Kommersant’s interlocutor on the market. However, he clarifies, for this it is necessary not only to reach an agreement with the Brazilian side, but also “to obtain the consent of the Chinese bank,” the banker notes.
Market participants also admit a “counter movement”—the entry of Brazilian investors into the Russian market. A Kommersant source at a top-5 bank explains that businessmen from Brazil are studying the possibilities of working in the country: “A delegation came to Russia, they were seriously looking for a bank to buy.” According to another Kommersant interlocutor from among the bankers, the Brazilians “most likely wanted to buy a bank in order to engage in a fairly profitable transaction business, which non-sanctioned banks are now engaged in in the Russian Federation.”
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