Russian government approves the privatisation of VTB bank
The Russian government has approved the privatisation of VTB – Russia's second largest bank in terms of assets and capital. Up to 50% of VTB shares will float in Russia and the rest on international stock exchanges.
Speaking at a government meeting on Thursday, Economic Minister German Gref revealed that VTB will hold an IPO in May of next year which is expected to raise around $US 4.5 BLN. Gref said up to 50% of VTB shares will float in Russia and the rest on international stock exchanges. The minister said the bank will use up to 70% of the raised funds on long-term lending and explained why the bank was in need of additional capital. “As of December 2006, VTB's assets grew 11 times compared to the year 2000. The bank's loan portfolio rose 6 times over the same period. But the bank's capital grew only 3.7 times. So it's this difference – the undercapitalization of the bank - that creates the need for certain measurers,” Russian minister pointed out.