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Russia’s VTB writes off stake in Otkritie
November 11, 2017
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MOSCOW: Russia’s VTB, the country’s second-largest bank, wrote off its stake in the Otkritie Holding Company in the third quarter and does not expect any further impact, its Deputy Chief Executive Herbert Moos said.

State-controlled VTB holds a 9.9 per cent stake in Otkritie Holding, the parent company of the bank, which was bailed out in August by Russia’s central bank. Shareholders may lose all their investments in Otkritie under the bailout.

As a result of the Otkritie writedown, VTB posted 17.4 billion roubles in third quarter net profit, down 7 per cent year-on-year, slightly missing analysts’ forecasts.

The bailout of Otkritie, followed by a rescue of B&N Bank sent shockwaves across the Russian banking sector, with other Otkritie shareholders such as Buduschee, one of Russia’s top pension funds, tipped into a loss for January to September.

VTB holds stakes in the mid-sized oil company Russneft and electronics retailer M.Video, both part of the Safmar industrial group and a former owner of B&N bank, as collateral.

Asked whether VTB has transferred any of this collateral to the central bank as part of B&N’s bailout, Moos said that VTB was not in talks with the central bank on either.

VTB said loan provisions were 42.2 billion roubles in the third quarter, down nearly 4 per cent from a year earlier, while net interest income rose 13 per cent to 116.6 billion roubles.

Reuters

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