Russia's VTB to raise $1.2 billion from SPO in capital top-up

2023-06-07 15:21

By Elena Fabrichnaya MOSCOW Russia's No. 2 lender VTB expects to raise 94 billion roubles ($1.15 billion) in

By Elena Fabrichnaya

MOSCOW Russia's No. 2 lender VTB expects to raise 94 billion roubles ($1.15 billion) in its secondary public offering (SPO), CFO Dmitry Pyanov said, in a capital top-up that will see an undisclosed investor acquire a chunk of the state's share in the bank.

VTB purchased rival Otkritie for 340 billion roubles from Russia's central bank late last year and is now placing 9.3 trillion additional shares in an offering that will reduce the state's share in VTB's capital to 61.8% from 76.4%.

Pyanov, in comments cleared for publication on Wednesday, told reporters that only non-state investors had participated in the secondary offering, which will be registered by the central bank after June 8.

Small private investors accounted for a lot of the capital raised, Pyanov said, declining to name the anchor investor.

VTB has faced capital issues since sweeping Western sanctions were imposed on Russia's financial sector.

"We are a sanctioned issuer and we believe that the risks of sanctioning our counterparties have not been exhausted and we do not want to expose this new investor to this risk," Pyanov said.

CLOSING FX POSITIONS

VTB expects to bounce back to profit this year after a sanctions-induced net loss in 2022. Pyanov said the bank's profits this year should be nearer the upper end of VTB's forecast range of 327-400 billion rouble.

Mirroring Russia's wider financial sector, VTB is pivoting away from currencies from "unfriendly" countries - those that imposed sanctions against Moscow - to "friendly" currencies, primarily China's yuan.

Pyanov said VTB had open foreign currency positions totalling just over 1 billion euros ($1.07 billion), down from 9 billion euros at the start of 2023.

He said this change reflected converting loans into roubles or yuan, proxy hedging unfriendly currencies against the yuan or using derivatives in the limited markets still available to VTB.

The bank is also working on accessing assets frozen overseas, Pyanov said, and will move "hundreds of billions of roubles' worth" of these to a separate structure outside the group in 2024.

($1 = 81.4500 roubles)

($1 = 0.9362 euros)

(Reporting by Elena Fabrichnaya; writing by Alexander Marrow; editing by Jason Neely)