23:42 GMT +325 September 2017
Live
    Russia

    VTB Bank's charter capital to be increased by $5.5 bln - Putin

    Russia
    Get short URL
    0 502

    The Russian government is to allocate 200 billion rubles ($5.5 billion) to state-controlled VTB Bank, Russia's second largest bank, to increase its charter capital, Prime Minister Vladimir Putin said Thursday.

    MOSCOW, February 5 (RIA Novosti) - The Russian government is to allocate 200 billion rubles ($5.5 billion) to state-controlled VTB Bank, Russia's second largest bank, to increase its charter capital, Prime Minister Vladimir Putin said Thursday.

    Furthermore, the equity capital of the state national development bank, Vnesheconombank, will be increased by 100 billion rubles ($2.8 billion) and the bank may also receive another 100 billion rubles in a subordinated loan, Putin said.

    Putin also said he did not rule out the provision of additional support to state-run savings bank Sberbank.

    "The capital of state banks will be enlarged. We could be talking here about the state's participation in Tier 1 capital, i.e. an increase in state participation in these banks," Putin said.

    Putin said the Russian government also planned to provide an extra 100 billion rubles ($2.8 billion) in subordinated loans to private banks.

    "In the coming months, the state will considerably increase its share of participation in Tier 2 banking capital. First of all, this involves the capital of commercial, privately-held banks," Putin said.

    "The mechanism of allocating subordinated loans will be as follows: Apart from the 225 billion rubles [$6.2 billion] already allocated for these purposes, an additional 100 billion rubles will be channeled in," Putin said.

    Putin said state subordinated loans would be granted to commercial banks whose shareholders would make decisions on the corresponding increase of equity capital at their own expense for the purpose of recapitalization.

    "This means that for every ruble of additional capitalization, commercial banks will receive 1 ruble of a subordinated loan," Putin said.

    At the same time, Putin ruled out the state's direct participation in the equity capital of commercial banks.

    "We consider it inexpedient for the state to enter directly into the Tier 1 capital of private institutions, that is we are not seeking to directly buy out the shares of private banks," he said.

    Community standardsDiscussion
    Comment via FacebookComment via Sputnik
    • Сomment