Conversion of VEB sub-loans may boost tier one capital ratios, but Russian banks need more measures warns Fitch

With Russian banks facing increasing constraints to their capital structures under the new slew of sanctions from the US and EU, Russian banks’ newly allowed ability to convert subordinated bonds received from VEB in 2008 into preferred shares may ease the pressure, according to a new report from Fitch Ratings. However, the rating agency stresses that further measures may be needed to support the banks’ capitalisation in the longer term.