December 28, 2017 / 3:10 PM / 9 months ago

Russia's Deposit Insurance Agency has used $14 bln of central bank credit line

MOSCOW, Dec 28 (Reuters) - Russia’s Deposit Insurance Agency (DIA), set up by the government to pay out deposits in the event a bank goes bust, has used 80 percent of its credit line from the central bank in payouts so far, it said on Thursday.

The DIA, which was established in 2004, said in emailed comments to Reuters it had used a total of 821 billion roubles ($14 billion) out of a credit line of up to 1.030 trillion roubles that is due to be repaid by 2025.

The agency expects to repay the money by reshaping the loan books of troubled banks, as well as selling or improving assets.

The scale of payouts highlights the challenges Russian banks faced during a recent economic downturn caused by plunging commodities prices and Western sanctions. The Russian economy has this year returned to modest growth.

The DIA’s payouts do not include money used this year to bail out three major private banks - Otkritie, B&N and Promsvyazbank.

The central bank this year changed the way bailouts are conducted and established a new fund which took over those three banks. It has estimated it may need around 1 trillion roubles to restore them to financial health, - funds which are separate from the DIA’s credit line.

Prior to the new bailout arrangements, the DIA also used to provide funds to Russian banks which, in agreement with the agency and the central bank, took over troubled banks. In some cases, it also helped to revive banks without outside help.

It spent a total of 1.3 trillion roubles on these measures.

Russia’s central bank has revoked 62 bank licences this year, reducing the number of banks to 519 from more than 1,000 a few years ago.

$1 = 57.5140 roubles Reporting by Tatiana Voronova and Katya Golubkova; Editing by Mark Potter

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