Transneft has RUB 19 billion stuck at troubled banks

07-04-2016
Transneft has acknowledged that it had approximately RUB 19.2 billion deposited on accounts with delicensed banks at end of 2015. Most of that amount was probably deposited with Vneshprombank and CB Intercommerz (Ltd).
Transneft’s deposits on the accounts which cannot be used for transactions anymore amounted to RUB 19.198 billion at the end of 2015, according to the company’s IFRS report published on Thursday. In the explanatory note to the report, the company commented that it had created provisions for debt receivables, “including a provision for the possible losses of the group’s money funds on accounts with the banking institutions following the revocation of their licenses by the Bank of Russia.”
Igor Demin, advisor to the President of Transneft, declined to disclose the banks at which the company’s funds were blocked. However, Vneshprombank (VPB) is known to be one of the collapsed banks where the Russian pipeline transportation monopoly kept its money. Vneshprombank ranked 34th in terms of asset size (RUB 283 billion, according to Interfax-Center for Economic Analysis), but in December 2015, the Central Bank of Russia appointed a provisional administration to manage the bank. A source close to VPB told RBC that Transneft was the biggest creditor of the Bank, with more than RUB 20 billion deposited on accounts. A representative of Transneft later noted that the company had RUB 9 billion left at VPB.
Besides, the problems with VPB in December caused delays in the payment of salaries to employees of Transneft subsidiary Transnefteprodukt, Demin told RBC adding that this issue was solved promptly as payroll cards were opened with Sberbank of Russia for Transnefteprodukt employees.
The other Bank where Transneft’s money got stuck is CB Intercommerz (Ltd) which forfeited its license on February 8. According to the list of the Bank’s liabilities as of January 1, 2016, the company’s deposits with that bank amounted to RUB 6.6 billion.
The billions of rubles left on the accounts with troubled banks is not Transneft’s only recent plague. At the end of 2014, the company lost more than RUB 70 billion (almost 10% of the total revenue) due to currency swap transactions, according to the IFRS report. The company purchased put options and sold call options on the US dollar in 2013; these transactions amounted to $4.2 billion in 2013, $2.7 billion in 2014 (the exercise period for the options purchased in 2013 was from May 2013 to October 2014, the exercise period for those purchased in 2014 was in August-December 2014, the months of severe Russian ruble devaluation).
Last year, the Government of Russia even instructed the Ministry of Finance, the Ministry of Economic Development and the Bank of Russia to consider the letter of the Association of Institutional Investors addressing Transneft’s losses from operations with derivatives, Interfax reminds.
In 2015, however, Transneft reduced net loss from derivatives almost 15 times to RUB 5.1 billion, as follows from the company’s 2015 report. “The loss reduction reflects the slower Russian ruble depreciation vs. the US dollar in the reporting period,” the document points out.

For details, see the RBC materials:
http://www.rbc.ru/business/07/04/2016/570684cb9a7947907f94e1ca
 
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