February 1, 2018 / 4:29 PM / 7 months ago

CORRECTED-UPDATE 1-Russia's Promsvyazbank saw 31 pct outflow of client funds in December - data

(Corrects to fix references to month in paras 6, 10 and 12)

By Anton Zverev and Katya Golubkova

MOSCOW, Feb 1 (Reuters) - Russia’s Promsvyazbank (PSB), which is subject to a central bank bailout, saw a 31 percent outflow in client funds in December, a Reuters analysis of central bank data showed on Thursday.

In response to a Reuters request for comment, PSB confirmed Reuters calculations that total client funds were at 658 billion roubles ($11.70 billion) as of Jan. 1, down from 950 billion roubles as of Dec. 1, a drop of 31 percent.

The bank declined to give specifics when asked what the reason was for the outflow of funds. It said that if private banking is excluded, retail client funds were up in December.

It also said there had been a ‘short-term’ outflow in corporate funds before the central bank bailout in mid-December. It did not say what share of the outflow was before the bailout, and how much had been taken out since then.

The Russian central bank on Dec. 15 last year took over temporary control of Promsvyazbank, saying it was struggling to cope with a hole in its balance sheet.

Russia’s finance ministry announced in January that Promsvyazbank would be transformed into a special state-controlled bank for servicing Russia’s defense sector.

That decision was announced after the period covered by the central bank data on deposit flows.

Several senior Russian bankers had asked for the creation of such a defence bank because they feared that if their own banks serviced the sector — which is subject to U.S. sanctions — they themselves could be hit by sanctions.

However, the fact that Promsvyazbank was designated by the government as a defense industry bank meant that it was now at risk of being subject to sanctions.

Some people in the banking sector told Reuters last month that this increased risk could prompt some of Promsvyazbank’s depositors to review where they keep their money.

The bank’s clients included Sibur, Novatek, Gazprom Neft, Transneft, Rosneft and Lukoil, the former co-owner of Promsvyazbank told Reuters last year, before the bailout.

Asked about their stance on Promsvyazbank in January, Rosneft, Sibur, Novatek and Gazprom Neft declined to comment, while Lukoil did not respond.

A Transneft spokesman told Reuters at the time the company does not currently have dealings with PSB. PSB is set to be recapitalised and transferred to the government by April to start servicing the defence sector. ($1 = 56.2525 roubles) (Additional reporting by Alexey Avdeev and Tatiana Voronova; Editing by Christian Lowe)

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