Key rate not main obstacle to investments — Sberbank CEO

The Bank of Russia will definitely reduce the key rate but the high rate is not the main obstacle to investments, Chief Executive Officer of Sberbank Herman Gref said on Tuesday in an interview with Rossiya 24 TV Channel.

The Bank of Russia will definitely reduce the key rate but the high rate is not the main obstacle to investments, Chief Executive Officer of Sberbank Herman Gref said on Tuesday in an interview with Rossiya 24 TV Channel.

"Rates will be definitely declined. This is up to the Central Bank to decide when and to what extent," Gref said. At the same time, "rates are not the key obstacle to investments, causes [of that] are in non-monetary sphere," he added.

The rate reduction may slightly incentivize lending, Gref said. "However, I see no dramatic change in the landscape even if the rate drops by 2-3%," he said.

"I see potential for the rate reduction. Inflation slowed down dramatically," Gref said. "I think this will slightly incentivize lending," Gref said.

Sberbank's plans

Sberbank has plans to continue lowering interest rates on corporate loans but the credit institution does not see any significant demand growth, Gref said.

"We are steadily lowering rates and have plans to reduce them further. Rates on the market are already highly acceptable," Gref said. "However, we do not see major demand growth in the corporate sector," he added.

Sberbank also has plans to continue lowering interest rates on corporate loans but the credit institution does not see any significant demand growth, the banker said, adding Sberbank does not experience problems with the capital.

"We have no problems with the capital to date; our ruble liquidity is sufficient. Banks slashed borrowings from the Central Bank by 6 trillion rubles ($90.8 bln). Speaking about the second quarter, I think we will reach zero borrowings from the Central Bank," Gref said.

Modern governance model

Russia needs to expedite selection of a modern governance model and reforms, the banker said. 

"We need to accelerate in terms of making decisions to select our modern governance model and in respect of implementing performs. If we stall for several years, then the gap [with Western competitors - TASS] may be dangerous," Gref said.

"I do not believe our country hopelessly falls behind. We will honestly say we lag behind the best Western competitors but I wouldn’t say the delay is catastrophic. We have all chances to catch them up," Gref said.

First published by TASS.

All rights reserved by Rossiyskaya Gazeta.

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