Russia's Sberbank has tapped yuan liquidity via central bank swaps -CEO

By Alexander Marrow and Elena Fabrichnaya

(Reuters) -Demand for the Chinese yuan is growing in Russia, the CEO of Sberbank said on Friday, adding that the lender has made use of central bank currency swaps providing yuan liquidity.

The dollar was king in Russia for decades after the collapse of the Soviet Union in 1991, but over the past year the yuan has grown significantly in importance.

Western sanctions over the Ukraine conflict and Russian countermeasures have drastically reduced Russia's ability to conduct business in dollars.

CEO German Gref said Sberbank was gradually raising its interest rates on yuan deposits and had resorted to borrowing from the Russian central bank in yuan several times.

Gref said shareholders at the bank's annual general meeting on Friday had supported the board's recommendation to pay a record 565 billion roubles ($6.94 billion) in dividends.

"Half of these funds will be paid to the state as our controlling shareholder," Gref said. "The other half will go to the more than 1.5 million people who are our private shareholders."

Gref said the share of non-residents' capital in the bank had fallen to around one third. That includes around 5% of non-convertible depositary receipts, he said, without specifying in which jurisdiction.

Sberbank said its non-resident share for 2021 was 44.37%.

Sberbank will also contribute some profits to a one-off windfall tax that the government plans to levy to help cover its widening budget deficit. Gref said the bank would take advantage of an early payment option and direct around 10 billion roubles to the budget.

Gref said Sberbank was not engaged in any talks with Austria's Raiffeisen Bank International over an asset swap.

The Financial Times newspaper reported in March that Raiffeisen was seeking to exchange $400 million worth of profits with some of Sberbank's funds frozen in Europe.

($1 = 81.4000 roubles)

(Reporting by Alexander Marrow and Elena Fabrichnaya; editing by Susan Fenton, Kirsten Donovan)