Russia's VTB board approves share issue plan

MOSCOW, July 13 (Reuters) - Shareholders in VTB (VTBR.MM), Russia's second biggest lender, have approved plans for an October share issue, the state-controlled bank said on Monday after it finished counting shareholder votes from its annual meeting. The meeting, held on June 29, approved the issue of 9 trillion shares with a nominal value of 0.01 roubles, to be placed through open subscription, the statement said.

Chief Financial Officer Nikolai Tsekhomsky told the bank's annual meeting that the issue could be followed by a second placing in 2010 if the Russian economy -- in the grip of its first recession in a decade -- deteriorates [ID:nLT16910].

The Russian government has charged banks -- especially state-controlled ones such as VTB -- with kick-starting growth by giving affordable loans to the real economy.

But with bad loans growing and asset quality deteriorating, banks need extra capital to balance their books.

VTB's board also approved a 2008 dividend at 11.2 percent of net profit, or 0.000447 roubles per share, in line with expectations but down sharply from the 25 percent paid out in 2007 [ID:nLD51478]. (Writing by Toni Vorobyova; Editing by Greg Mahlich)