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. Last Updated: 07/27/2016

Sberbank to Honor Deposits 'Later'




If Monday, Aug. 17 didn't kill all Russian faith in the banking system, Monday, Nov. 30 may have finished off what little was left.


Monday was the day that thousands of citizens had been promised access to their personal savings deposits, which the government took over back in September from large troubled commercial banks. The accounts were transferred to state-owned Sberbank, and depositors were told to wait weeks.


The weeks went by. But with the deadline up, Sberbank vaguely and not-very-energetically announced there were technical problems, and a lack of cash, and sometimes both, and so not much point in depositors showing up. Perhaps another day.


Even as it was "defaulting" on those guaranteed deposits, Sberbank proudly announced Monday that on Tuesday it would pay off in full a $225 million syndicated loan to West Merchant Bank Ltd. and NatWest Markets.


In warm September, failure to pay depositors brought long lines to the doors of troubled commercial banks - including the six original participants in the Sberbank bailout: SBS-Agro, Inkombank, Menatep, MOST-Bank, Promstroibank and Mosbiznesbank.


But with temperatures of minus 23 degrees Celsius Monday, only a few disgruntled depositors could be seen at any of the Moscow Sberbank branches.


Late last week there had already been talk of Sberbank missing the deadline. Formal news of that trickled out on morning radio broadcasts Monday. Sberbank faxed a statement to some media that suggested that transferring accounts from two banks, SBS-Agro and Inkombank, could take weeks. Sberbank President Andrei Kazmin, meanwhile, mentioned on a radio broadcast that his bank might not ***ever*** cover accounts transferred from Inkombank.


Inkombank was the second-largest commercial bank before the system collapsed, but Kazmin left that intriguing trial balloon at that. The government, meanwhile, was otherwise silent on its failure to meet the deadline. There were no official ads placed in the national press nor any televised apologizes for the inconvenience.


Of four Sberbank offices visited in central Moscow, only one thought to hang a sign on its door about the matter. The sign told depositors their accounts would be serviced "later," at a time to be announced by the Central Bank.


"We are just waiting from some word from the top," said a teller at one Sberbank, who said she had shooed away a short line of seven people who'd been waiting at the door before the bank opened.


The Central Bank in September promised depositors who could not access their frozen accounts at those six ailing commercial banks that their 9 billion rubles in deposits would be guaranteed if they transferred them to Sberbank.


After initially announcing a 100 percent guarantee, the Central Bank fell silent for days before offering more details: Ruble accounts would be paid without interest; hard currency accounts would be paid in rubles at the feeble rate of 9.33 rubles to the dollar; and none of the money would be seen before Nov. 30.


Although the government broke that promise Monday, Russian depositors took the news in stride.


"With whom are we supposed to be angry? The government? They've been treating us this way for seven years," said Tatyana Filipova, who moved her accounts from SBS-Agro to Sberbank.


"I think the process has just been delayed," sighed Zoya Klapova, 54, standing in a fur coat in a Sberbank on Tverskaya Ulitsa and waiting for access to accounts transferred from SBS-Agro and Most-Bank. She added, "Every day we wait means our money loses more value against inflation."


Sberbank's statement on Monday repeated early pledges to honor all deposits, in apparent contradiction of Sberbank president Kazmin's suggestion to the radio that Inkombank might be dropped.


"Sberbank of Russia guarantees all citizens whose deposits will be transferred from the said commercial banks that payment in cash or crediting of those deposits to any type of Sberbank account will occur in full and without exception," the statement read.


A Sberbank spokesman said Most-Bank and Promstroibank were the only commercial banks to correctly file lists of depositors by a Nov. 28 deadline. Sberbank is ready to pay those depositors, the spokesman said, but "we still haven't received funds from the Central Bank."


The Central Bank is supposed to give Sberbank the six banks' required reserves along with additional financing, probably in the form of freshly printed money, to cover the 9 billion rubles of deposits transferred to Sberbank.


A Most-Bank spokesman said Most-Bank had filed all necessary paperwork and informed its depositors which Sberbank branches they could use. "We did our part of the work," the spokesman said. "Now we are waiting for Sberbank to pay."


Money for Most and Promstroi depositors could be ready by the end of the week, said the Sberbank spokesman. That might also be true for the relatively small amount of Menatep and Mosbiznesbank retail clients, assuming those banks also soon file the paperwork correctly, the Sberbank spokesman said.


But lists filed by SBS-Agro contained many mistakes, including the failure to convert the bank's debit-card accounts into standard bank accounts, the Sberbank spokesman said. Next week Sberbank and SBS-Agro management will begin a round of meetings to start hammering out an agreement.


Asked if SBS-Agro depositors could hope to be paid by the end of the year, the Sberbank spokesman said he did not want to speculate.


Inkombank depositors, meanwhile, appear all but abandoned. Because the bank's license was revoked and external managers appointed after former Inkombank managers signed up for the transfer scheme Sept. 26, the signatures of the former managers are no longer valid, Kazmin explained on Ekho Moskvy radio Monday.


The Central Bank will now re-examine whether to allow Inkombank to transfer deposits at all, Prime-Tass quoted Kazmin as saying.


Together, accounts transferred from Inkombank and SBS-Agro equal 4.3 billion rubles ($ 240 million) - or about half of the total sum moved to Sberbank.


Analysts say that if all depositors began withdrawing and spending their 9 billion rubles at once, the event could speed further inflation.


SBS-Agro depositor Filipova said she doesn't expect to get her money tomorrow, but would be happy if she eventually retrieved half of her hard currency account.


"The other half I will consider I have given as a gift to the government," she said.