The Bank of Russia is implementing additional measures to support the financial sector and lending to the economy

Against the backdrop of hostile actions by foreign states and international organizations, the Bank of Russia is implementing a set of additional measures to support the financial sector and its ability to lend to the Russian economy.

1. Some foreign companies have decided to sell their Russian business. In some cases, the Government Commission for the Control of Foreign Investments may agree on a deal to transfer these enterprises to new owners. Such a transfer will help preserve jobs and restore the economy.

In this regard, when calculating the mandatory ratios of banks, the Bank of Russia will not apply increased risk ratios to credit claims arising from the financing by banks before January 1, 2023 of transactions for the repurchase by residents of the Russian Federation of shares (stakes) in organizations from non-residents, if there are permission of the Government Commission for the Control of Foreign Investments1. Banks will also be allowed not to apply paragraph 3.20 of Bank of Russia Regulation No. 590-P2 when assessing the quality of such loans, which prescribes that they be classified no higher than the third category of quality. Transactions aimed at financing the acquisition of shares (stakes) in financial institutions will not be deducted from the capital of credit institutions.

The measure is valid until the repayment of these loans provided before January 1, 2023.

2. Due to the change in country assessments according to the classification of export credit agencies for the Russian Federation and the Republic of Belarus, the Bank of Russia will exclude the use of a risk factor of 150% for claims in rubles and foreign currency to credit institutions of these countries when calculating the ratios using the standard approach. A risk factor of 150% will also not be applied to claims against the Republic of Belarus and the National Bank of the Republic of Belarus against the backdrop of a downgrade in the long-term credit rating (under the standard and finalized approaches).

This measure will reduce the pressure on the capital of creditor banks and support interbank lending, as well as allow to continue operations with sovereign debt instruments of the Republic of Belarus.

At the same time, when calculating the amount of market risk for debt securities of Russian banks, the use of a risk ratio of 8% (corresponding to a risk ratio of 100% for the purpose of calculating credit risk) will be retained. Bonds of Russian banks, for which increased coefficients are applied when calculating credit risk, will continue to be subject to a risk factor of 12%.

The measure is valid until December 31, 2022 inclusive.

3. The Bank of Russia will provide credit institutions with the opportunity to postpone the formation of reserves for possible losses in relation to:

— claims against NCO NCC (JSC), NCO JSC NSD in the context of the suspension of operations by foreign depositories storing Eurobonds of Russian issuers due to restrictive measures;

— assets blocked due to unfriendly actions of foreign states and international organizations in relation to Russia.

This measure will reduce regulatory risks for banks and pressure on capital, which will facilitate their adaptation to new conditions. In the future, after the stabilization of the situation and the appearance of information about the recoverability of these assets, a decision will be made on the need to create additional reserves for them.

At the same time, these assets are included in the calculation of the bank's capital adequacy ratios with a risk ratio of 100% and, in order to correctly reflect the liquid position, are excluded from the list of liquid assets when calculating the ratios of instant and current liquidity (N2 and N3), are not subject to inclusion in the numerator of the long-term liquidity ratio ( H4).

With regard to non-credit financial institutions, such as professional participants in the securities market, non-state pension funds and management companies, the Bank of Russia also plans to ease the calculation of prudential ratios3.

The measure is valid until December 31, 2022 inclusive.

4. The Bank of Russia will provide credit institutions with the opportunity, when assessing the credit risk of legal entities that issue securities, to form reserves for possible losses and calculate mandatory ratios, in the event of limited or non-existent financial information subject to disclosure and (or) provision of up-to-date financial information (and the impossibility of obtaining it in bilaterally under non-disclosure agreements), use data as of July 1, 2021. At the same time, the condition of the absence of signs of default, bankruptcy and other negative information about the financial condition and solvency of this issuer must be observed.

The measure is valid until December 31, 2022 inclusive.

5. The Bank of Russia introduces an easing on the structural liquidity ratio (net stable funding ratio) N28 (N29) to preserve the ability of systemically important credit institutions to lend to the economy in the face of changing structure and urgency

liabilities, as well as blocking some assets.

The Bank of Russia will not take measures if the decrease in the actual value of the ratio below the minimum acceptable numerical value occurred as a result of an increase in the imbalance between sources of stable funding and long-term assets, caused, among other things, by a change in the resource base, blocking (unavailability) of assets or deterioration in their quality, prolongation of loans and other similar factors.

The measure is valid until December 31, 2022 inclusive.

6. The Bank of Russia draws the attention of credit institutions to the fact that in the current conditions, non-compliance with capital adequacy mark-ups is allowed. This is not non-compliance, but the bank should limit the payment of dividends and bonuses to management. In case of non-compliance with the allowances, the bank must also draw up and submit to the Bank of Russia a simplified plan for restoring the amount of capital, indicating a specific list of measures.

7. Due to the difficult economic situation, the Bank of Russia recommends refusing to pay dividends in 2022 to banks that comply with markups, as well as to non-credit financial institutions.

According to the press service of the Bank of Russia