Central Bank could lend $9bn for BoM bailout

The Central Bank of Russia (CBR) is prepared to provide a loan worth some RUB 250bn (approx. USD 8.97bn) to state-owned Deposit Insurance Agency (DIA) to bail out The Bank of Moscow (BoM), RBC Daily reported today, citing a source at CBR. According to DIA First Deputy CEO Valery Miroshnikov, the CBR's funds could be deposited for a long term with BoM. VTB, the major shareholder of the bank, is also expected to provide RUB 100bn (approx. USD 3.59bn) to the distressed lender, Miroshnikov added. A source close to the Finance Ministry told the daily that CBR could provide a 5-year RUB 300bn (approx. USD 10.76bn) subordinated loan to DIA at 0.1% to help out Bank of Moscow. The loan will carry a 5-year extension option. Of the total amount, 50% will be used to write off the bank's bad loans and the other half to bolster its financial position. DIA could provide funds to BoM if VTB increases its stake in the bank from 46.48% to 75% during a short period of time.