INTERVIEW-Russia's Promsvyazbank to use $154 mln of profits to bolster capital buffers

capital buffers@

* Russian private banks under pressure from recent bailouts

* PSB to sell assets, use profits to boost capital: co-owner

* Has 240 bln roubles in liquidity for any shocks

* Did not and does not plan to ask cenbank for bailout: chairman (Adds details, quotes, background)

MOSCOW, Nov 3 (Reuters) - Promsvyazbank, one of Russia's biggest private lenders, plans to use expected profits of 9 billion roubles ($154 million) for October and November to increase its capital ratio, its chairman told Reuters.

Russian banks are under pressure to bolster their capital buffers after the central bank recently took over two major banks, Otkritie and B&N, incorporating them into a new bailout fund.

Chairman Dmitry Ananyev, in an interview conducted on Thursday, said Promsvyazbank (PSB) would not need a bailout and a sale of non-performing assets in the industrial sector would also contribute to its profits. He did not specify which assets.

The bank was also on the lookout for a foreign or domestic investor to take a stake in the bank, he said.

PSB made a net profit of around 6 billion roubles for the first nine months of this year under Russian accounting standards, said Ananyev, who controls the bank along with his brother.

PSB plans to close deals to sell some non-performing assets this month, which together with its usual banking business should allow it to earn 8 billion-9 billion roubles for the October-November period, he said.

"This will allow us to meet capital level requirements which are increasing from Jan. 1. The base capital level (N1.1) I forecast at no less than 7.2 percent," he said.

The Russian central bank is gradually tightening capital requirements, particularly for systemically important lenders such as PSB.

According to Reuters calculations, PSB should have an N1.1 level of no less than 7.025 percent as of Jan. 1 compared to 6.486 percent as of Oct. 1.

Addressing market concerns about the bank, Ananyev said that PSB was not in any talks with the central bank about a possible bailout and did not plan to hold such talks.

"The second part of the year is developing in not the easiest way - we have to focus on keeping clients and accumulating additional liquidity," Ananyev said.

He added that in October, the bank saw inflows of around 7 billion roubles from retail clients, while total outflows from both retail and corporate accounts were around 20 billion roubles, not a "critical" amount for the bank.

"There were one-day shocks of up to $300 million (of fund withdrawals), this was in August. But later, as usual, these funds return. The bulk of clients continue to work with us," Ananyev said.

The bank has a liquidity cushion of around 240 billion roubles, maintained in case of any further major outflows, Ananyev said.

"We do not hold any talks and do not plan to hold such (talks with the central bank on a bailout)," he said.


PSB, traditionally focused on small and medium-sized firms, attracted business from big companies such as Lukoil and Rosneft after Western sanctions were imposed on some Russian state banks and companies in 2014.

Ananyev said that Sibur, Novatek, Gazprom Neft, Transneft, Rostec, Rosneft, Lukoil and other names are among PSB depositors. Some, such as Novatek, use the bank to pay staff salaries.

Novatek's Chief Executive and co-owner Leonid Mikhelson owns a 3.3 percent stake in PSB, according to PSB's latest filing. Ananyev said that the bank had not asked Mikhelson to inject funds into the bank.

Ananyev said he and his brother Alexei, who together control just over 50 percent of PSB, were "always" ready to consider providing the bank with capital if needed but had no plans to do so this year.

"In general, we see that the situation (regarding capital) will remain tight (next year). We hope that a serious interest will emerge from foreign investors, maybe there will be productive talks with domestic investors... We need to increase capital," he said.

The European Bank for Reconstruction and Development, the Safmar industrial group and the Credit Bank of Moscow are among PSB's shareholders. Credit Bank of Moscow is a nominal holder of an 8.89 percent stake in PSB.

Ananyev reiterated that PSB plans to reconsider a merger with its smaller peer Vozrozhdenie, in which the Ananyevs own almost a 53 percent stake, next year, after postponing the deal last month.

"There were no disagreements among our shareholders (on the merger)... Neither negative recommendations (from the central bank)... But this was our (the Ananyevs') decision," he said.

"We decided that our positive event of merger would be muted amid overall nervousness and a totally different merger between Otkritie and B&N." ($1 = 58.5512 roubles) (Reporting by Katya Golubkova; Additional reporting by Oksana Kobzeva and Andrey Ostroukh; Editing by Susan Fenton)