Russian Financial Sector Update

Bank of Russia BANK OF RUSSIA: OVERVIEW The Central Bank of the Russian Federation NEWSLETTER Key news from the Bank of Russia 14 July 27, 2018 The Bank of Russia keeps the key rate at 7.25% p.a. July 24, 2018 June 25, 2018 May 23, 2018 May 21, 2018 May 1, 2018 April 24, 2018 April 23, 2018 January 1, 2018 Higher requirements introduced to the minimum authorized capital for insurers: RUB 450 mln for companies offering life insurance, RUB 300 mln for personal and property insurers and RUB 600 mln for reinsurers. The Bank of Russia introduces 16 criteria of economic relations between related party-borrowers to calculate N6. The Bank of Russia raises risk weights on FX loans and securities, effective from July 1. The new FX risk weights are: 110% (from 100%) for exporters, 150% (from 130%) for real estate purchase, 130% (from 110%) for other FX corporate loans. Launch of cross-margining across markets on the base of Unified Collateral Pool on the Moscow Exchange. The Bank of Russia tightens the regulation of unsecured consumer credits by reviewing its requirements for risk ratios. The Bank of Russia suggests introducing the principle of proportionality in non-bank financial institutions regulation. Law on rehabilitation of insurance companies was signed. ✓ The risk ratios for mortgage loans with LTV higher than 80% and 90% are tightened by the Bank of Russia, reaching 150% and 300% respectively. ✓ Basel III in force: Leverage ratio (except for banks with basic license), NSFR – for D-SIBS - ✓ Unification of personal income tax regimes for Ruble bonds and bank deposits Bank of Russia switches to proportional regulation of the banking system ✓ Capital buffers under Basel III are increased: capital conservation buffer is 1.875%; countercyclical capital buffer is 0%; buffers for systemically important banks are at 0.65% ✓ Banks are required to introduce IFRS 9, which supersedes IAS 39

View entire presentation