Russia's defense-focused bank steps up gold purchases: Finance Minister

MOSCOW (Reuters) - Russian state lender Promsvyazbank PSBR.RTS (PSB) has stepped up gold purchases in the market, Deputy Finance Minister Alexei Moiseev said on Tuesday.

FILE PHOTO: Russian Deputy Finance Minister Alexei Moiseev attends a session of the annual international military-technical forum "ARMY" at Patriot Expocentre in Moscow Region, Russia August 22, 2018. REUTERS/Maxim Shemetov

His comments follow reports by Russia’s business daily Kommersant which cited a PSB earnings report last week that the bank’s precious metals purchases jumped to 23.9 billion roubles ($362.15 million) from 0.8 billion roubles in the first half of the year.

Based on the central bank’s gold purchase prices, the precious metals purchases were the equivalent of more than 8 tonnes of gold, the paper said.

The PSB report, however, was later deleted and the bank republished it without the precious metals report.

Asked about the jump in the precious metals purchases, Moiseev confirmed Kommersant’s report that PSB was buying gold but did not comment on specific figures cited by the paper.

“The jump is due to the fact that the bank is looking for niche markets and has started operating in the gold market,” Moiseev told reporters.

The most active players on the Russian gold markets among the banks are the state-controlled Sberbank SBER.MM and VTB VTBR.MM, who both have special trader teams for conducting such operations.

Moiseev did not specify how PSB was buying gold or why. PSB officials were not immediately available for comment.

Asked why the PSB report which initially showed a jump in the precious metals purchases was adjusted, he said: “Gold matters are not completely transparent and open, this is why we decided to do so.”

In 2017, the Russian central bank took over PSB, once among Russia’s biggest private banks, and turned it into a lender for the country’s defense sector.

The move was aimed to shield Sberbank and VTB from potential new U.S. sanctions. The government has also freed PSB from the obligation to disclose financial results and board of director members.

($1 = 65.9950 roubles)

Reporting by Andrey Ostroukh, Writing by Anna Rzhevkina; Editing by Katya Golubkova and Emelia Sithole-Matarise