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    GAZP   RU0007661625

PUBLIC JOINT STOCK COMPANY GAZPROM

(GAZP)
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Russia's top borrowers join calls to let banks use domestic ratings, central bank resists

08/08/2019 | 03:20pm EST
FILE PHOTO: Gazprom logos are on display at Bovanenkovo gas field

MOSCOW (Reuters) - Russia's top gas producer Gazprom and a raft of other major firms have added to calls for the banking sector to use domestic ratings in implementing new financial regulations, saying this would ease pressure on banks and cut lending rates.

Officials have challenged the way the central bank is instructing lenders to comply with new Basel III regulations.

The finance ministry says the capital buffers banks require under the rules should be set according to ratings by domestic agencies, while the central bank wants to use its own in-house assessments.

"It is very hard to forecast how accessible the external market will be for Russian borrowers for political reasons, so the development of our own financial market, including rating agencies, is timely," Gazprom Deputy Chief Executive Famil Sadygov told Reuters.

"We believe that using national ratings would make it possible to significantly lower pressure on (banking) capital, having a positive impact on the cost of borrowing, both for borrowers and banks."

Russian Finance Minister Anton Siluanov asked the central bank in July to postpone reforms requiring banks to increase capital buffers under the Basel III rules until domestic ratings can be used in that process, according to a letter seen by Reuters.

Russia started to actively develop its domestic ratings system after western sanctions were imposed in 2014. That led global rating agencies to cut Russia's sovereign rating, triggering a revision of the creditworthiness of Russian firms.

But critics say that Russia's domestic ratings lack in-depth statistics on defaults and cover a limited number of companies.

In a separate letter to President Vladimir Putin obtained by Reuters, heads of Gazprom, Tatneft, Novatek and Severgroup asked Putin to support the use of domestic ratings as "the best way to reflect the true credit risks of... borrowers".

According to the letter, a rare example of unity among Russia's top companies, using domestic ratings would allow banks to lower lending rates, strengthen financial stability, and ease the refinancing of external debt.

"Altogether, (it) will lead to an increase in the domestic economy's competitiveness, (and a) strengthening of the country's economic security," it said.

Russia's central bank told Reuters it remained committed to its present stance. "Our approach... allows the Russian banking system to free up much more capital to lend to the economy compared to the ratings-based approach."

A high-ranked source close to the Kremlin confirmed the authenticity of the letter, redirected by Putin to the relevant ministers and officials on July 29, and said the issue is likely to be discussed at governmental level.

A second high-ranked financial official confirmed that the government plans to discuss the issue. "If no common position is agreed, then a meeting at Vladimir Vladimirovich (Putin) level is possible," he said.

Novatek, Tatneft and Kremlin spokesman Dmitry Peskov did not respond to Reuters' request for comment.

(Reporting by Tatiana Voronova, Darya Korsunskaya and Elena Fabrichnaya; Writing by Katya Golubkova; Editing by Andrew Osborn, Jan Harvey and Alexandra Hudson)

By Tatiana Voronova, Darya Korsunskaya and Elena Fabrichnaya


ę Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED -2.65% 0.92 End-of-day quote.-41.03%
BEST INC. 5.98% 0.8715 Delayed Quote.-53.06%
GAZPROM -2.27% 9.058 Delayed Quote.65.68%
PUBLIC JOINT STOCK COMPANY GAZPROM -3.19% 335.5 End-of-day quote.57.74%
THE LEAD CO., INC. -0.76% 519 End-of-day quote.-38.21%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.08% 74.3607 Delayed Quote.0.47%
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Financials (USD)
Sales 2021 139 B - -
Net income 2021 30 903 M - -
Net Debt 2021 41 740 M - -
P/E ratio 2021 3,43x
Yield 2021 13,8%
Capitalization 107 B 107 B -
EV / Sales 2021 1,06x
EV / Sales 2022 0,97x
Nbr of Employees 477 600
Free-Float 50,5%
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Number of Analysts 11
Last Close Price 4,51 $
Average target price 5,86 $
Spread / Average Target 29,8%
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Alexei Borisovich Miller Deputy Chairman & Chairman-Management Board
Viktor Alexeevich Zubkov Chairman
Denis Vladimirovich Fedorov Head-Marketing & Administration Department
Yuri Stanislavovich Nosov Head-Administration Department
Timur Askarovich Kulibayev Independent Director
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