Page 70 - RusRPTDec18

November 27. "Due to VTB Bank owners' failure to take real steps to prevent insolvency, as well as due to a lack of adopted and realistic measures to improve liquidity, the NBU decided to recognise VTB Bank insolvent," the statement reads. Over the past weeks, the Ukrainian operations of VTB Bank has introduced restrictions on withdrawal of cash in the national and foreign currencies due to a decrease in liquidity caused by September's ruling of the Kyiv court of appeals to freeze the lender's assets, which deprived the bank of the opportunity to replenish liquidity by selling mortgaged property and assets acquired in foreclosure. The ruling to seize the shares of Ukrainian subsidiaries of Russian state-owned banks Sberbank, VTB and VEB followed a claim filed by 17 companies and one person, ex-chairman of the board of nationalised PrivatBank Oleksandr Dubilet, that lost their assets in Crimea as a result of its annexation by Russia in 2014. On November 5, the National Bank of Ukraine (NBU) said in a statement that the regulator observed "a certain decrease in liquidity" at VTB Bank, "which has developed along the process of winding down the operation of VTB and intensified by the decision of the Kyiv court of appeal [...] on freezing of assets of the financial institution".
Russia's second-largest bank state-controlled VTB made a buyout offer to minority shareholders of Vozrozhdenie Bank at RUB481.7 per share, Reuters said on November 2. VTB took over the bank in October and now controls 85% but is seeking full control from minority shareholders that have about 15% of the bank’s stock. Previous reports showed that in September VTB was prepared to buy a controlling stake of at least 75% in Vozrozhdenie that belongs to the former owners of the nationalised Promsvyazbank (PSB) Dmitri and Alexei Ananyev.
Russia's second largest state-owned bank VTB is getting ready to buy 70% in Zapsikombank, its third acquisition of a regional bank this year. The deal should be closed by the end of the year given all the necessary regulatory approvals, VTB announced without disclosing the value of the deal. The bank has already bought 85% in Vozrozhdenie Bank and 81% in Sarovbiznesbank. VTB could be seeking to strengthen its regional network as Vozrozhdenie has a strong position in the Moscow region, Sarovbiznesbank in Nizny Novgorod, and Zapsikombank in Tymen and Urals region. Reportedly VTB plans to rebrand and integrate Zapsikombank by 2020 and keep strengthening the position of the merged bank in Urals, doubling its network in the region post- acquisition. Zapsikombank bank is ranked 56th largest bank in terms of assets, with RUB117bn of assets, RUB15.7bn of capital, and RUB1.5bn profit in January-September 2018. Vedomosti daily reported citing unnamed sources that VTB's acquisition of the bank was in the works since 2016. The largest shareholder of Zapsikombank is Dmitry Goritksy with 20.7%, other shareholders include bailed Asian-Pacific Bank (ATB) with 10%. Goritsky is the former deputy governor of the Tymen region.
Russian government will extend support to Rosselkhozbank (Russian Agricultural Bank) to RUB15bn ($221mn) in 2019 and RUB10bn in 2020, Interfax and Vedomosti daily reported on November 9 citing amendments to 2019-2021 budget. In 2018 the bank already received RUB20bn ($295mn) of state support in the form of RUB5bn direct subsidies and RUB15 perpetual bonds issued. By the end of 2018 another RUB20bn will be granted to the bank. This confirms previous statements by Deputy Prime Minister Arkady Dvorkovich who said that Rosselkhozbank might still require additional recapitalisation in 2018. Rosselkhozbank could also continue to issue perpetual bonds, having already registered a possible issue of up to RUB90bn with the Central Bank of Russia (CBR). Analysts surveyed by Vedomosti
70 RUSSIA Country Report December 2018 www.intellinews.com