Russia's VTB may boost capital with new shares in 2013
VLADIVOSTOK, Russia (Reuters) - Russia's second-largest lender VTB (VTBR.MM) may carry out an extra share issue in 2013 to prop up its capital after prospects for such an issue this year had evaporated, Chief Executive Andrey Kostin said.
Banks across the globe are facing pressure on their capitals, which is a liquidity cushion essential to absorb shock such as the 2008-09 global crisis, euro zone debt woes and in some cases such as Russia - a rapid growth in lending.
Kostin, who also chairs a CEO summit, which is a part of a wider Asia-Pacific Economic Cooperation (APEC) summit in Vladivostok, said there was no opportunity to bolster VTB capital through a share issue till the end of this year.
"Maybe next year," he told Reuters on the sidelines of the APEC Summit, providing no additional details.
State-controlled VTB raised $1 billion in perpetual bond this summer in a first deal of its kind in Russia, which will improve its Tier 1 capital adequacy ratio by up to 1 percentage point. VTB's Tier 1 stood at 9.6 percent at the end of March.
Earlier this week, Kostin said that VTB, where the state owns a 75.5 percent stake, may top up a perpetual bond this autumn in the size of no more than an initial deal.
In an interview with Reuters Television, he also warned that Russian banks will need to limit lending, or otherwise their capital strength could be dangerously eroded.
Rapid lending growth in Russia, which this year reached 29 percent by August, has already subtracted almost 5 percentage points from the banking system's overall capital since the start of 2011.
It stood slightly above 13 percent as of August 1, while the central bank requires a minimum 10 percent level under local standards.
Kostin also said that VTB grew cautious of providing loans to Russian export-focused companies, who may suffer from both fading demand in Europe and falling commodity prices, but the bank planned no revisions to a 16 percent lending growth plan this year.
Russia's government had planned to reduce its stake in VTB further through a public sale but the central bank suggested that state-controlled lenders Sberbank (SBER.MM) and VTB would better bolster capitals by offering new shares, rather than pursue earlier plans to auction state stakes.
(Reporting by Katya Golubkova; Editing by Andrey Ostroukh)
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