Experts divide over the effect of VTB’s buy back

Reuters / Denis Sinyakov
Opinions are split over VTB’s share buy back: as some experts fear it may result in further problems, but others think it won’t hurt the bank’s credit profile in the long term.

­“It’s not really integral to the strategy the bank itself”, said Scott Bugie, Managing Director, of ratings agency Standard & Poor’s. “You wouldn’t expect this to happen again. This is really not something that makes much difference for the way we look at the institution and its credit profile or potential performance in the future”.

Other analysts believe the buy back would be discriminative as only small shareholders would be allowed to participate. “The deal would bring dividends only to a small group of shareholders and would probably increase uncertainty among investors about VTB’s strategy”, said Vladislav Metnev from the BKS invest company.

Some of them suppose, VTB’s initiative would lead in further conflicts and lawsuits. “This initiative creates several arbitrage opportunities which are not qualified as purely market honest practices”, says Vladimir Rozhankovsky from Nord Capital. “If certain categories of shareholders are granted privilege it must be explicitly explained why the other shareholders are not”. 

Meanwhile the market has already reacted negatively on VTB’s actions as the share price fell four days in a row. Analysts expect they would rise after the buy back and will return to the current level.