ST PETERSBURG— Russian President Vladimir Putin on Friday pledged to support major domestic banks by giving them more capacity to advance loans.
“We will capitalize the systemically-important Russian banking organizations more,” Putin said at the St. Petersburg annual investment forum.
Banks will be able to convert subordinated loans to shares to allow them to expand opportunities in giving loans and to reduce the price of loans, he said.
Russia's major state banks have said they could suffer from the Ukraine crisis and need capital to increase lending.
Russia's second-largest bank, VTB, said on Friday it would have to make higher loan provisions as a result of the Ukraine crisis and this would have an impact on the lender's first-quarter profit.
The country's largest bank, Sberbank, has an exposure of 130 billion roubles ($4 billion) to Ukraine - less than 1 percent of its balance sheet and has said it has plans in place to cope if the Russian economy worsens due to the Ukraine crisis and sanctions.
Putin also announced measures to help his country, the world's top oil and gas producer, diversify its energy exports.
Putin said Russia would expand access to cheap investment resources, introduce project financing in industries and would simplify the procedure for choosing investment projects.
It would also increase the localization of production to limit imports and return the market to national producers in energy equipment, textiles and food.
He said there was a plan to create a state fund to help replace imports from Western countries with domestic production.