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10 Mar, 2010 10:16

Alfa-Bank reveals names of largest borrowers

Alfa-Bank reveals names of largest borrowers

In an anticipation of an upcoming Eurobond issue, Alfa-Bank has disclosed the names of 10 of its largest borrowers who account for nearly a third of the banks loan portfolio, according to Kommersant.

According to the investment memorandum for the upcoming Eurobond issue, a large percentage of the loans were taken by companies of the Alfa-Group consortium. Others include Basel, Russian Railways, and holding company Estar Group, among others.

The disclosure makes Alfa-Bank the first to display such a level of transparency about its borrowers whose $4.5 billion dollars account for nearly 30% of the banks loan portfolio, the report says.

Maksim Raskosnov, an analyst at Renaissance Capital, says the banks new approach is in line with the changing market situation.

“Disclosing information about large borrowers makes the bank more transparent for the potential investor. The market conditions have changed after the crisis. Now it’s such that banks have to disclose more information to investors about their assets in order to attract funds on favorable terms.”

However, managing director of Otkrytie FC, Mikhael Avtukhov, says it’s hard to predict whether this will become standard for Russian banks.

“This information is prepared by almost all banks, but is usually not disclosed because it is not always a good indicator of the concentration of risk for large borrowers for every bank and the disclosure of such information is not always beneficial for all banks.”

Rusrating analyst, Alexandre Ponamaryov, says the information is publicly available, but that the step will be positive for the market.

“There are various ways to carry forward a company’s issues of securities and increasing transparency is one of them. This practice reflects a good tendency but doesn’t significantly influence the overall transparency level in the system. So, the information about the biggest debtors is a part of an obligatory report prepared for Russia’s Central Bank, and it’s not secret information for professional market players. However, generally speaking, such things positively effect the market.”