MOSCOW, April 15 Russia's No.2 bank VTB
is in talks to resolve a dispute with the Bank of England over
demands made on its UK business that the bank's CEO suggested
could be politically motivated in the light of the West's
standoff with Russia over Ukraine.
VTB said a week ago the Bank of England had made demands on
its UK subsidiary related to capital and liquidity which were
"unjust" although it saw no immediate threat to its business in
"In relation to our London subsidiary, we are currently in
dialogue with the U.K. regulator and expect ... a return to
business as usual with the U.K. regulator," chief financial
officer Herbert Moos said on a conference call on Tuesday to
discuss VTB's three-year strategy.
"We are the only Russian bank in the City of London and we
expect to continue to be a successful and profitable bank in the
City of London," Moos said.
Moos did not specify which U.K. regulator VTB was in
discussions with but VTB later confirmed he was referring to the
Bank of England.
The Bank of England declined to comment.
Last week, VTB CEO Andrei Kostin had said in an interview
with Russia's Izvestia newspaper that the bank had experienced
unusual demands from the Bank of England in relation to its
subsidiary which he suspected had political motives.
"In the last weeks, we have experienced very strong pressure
from the Bank of England towards our bank VTB Capital Plc in
London," said Kostin in the interview, replying to a question
about whether VTB had been hit by any punitive measures that
were not made public.
The European Union and the United States have imposed
targeted visa bans and asset freezes on Russian and Ukrainian
individuals in response to Russia's annexation of Crimea. VTB
was not targeted in the sanctions.
Britain has taken a hard line on banks generally after a
string of taxpayer-funded bailouts during the financial crisis.
As a result, foreign banks are under pressure to hold adequate
amounts of capital and liquidity in Britain to avoid taxpayers
having to step in if they go bust.
VTB's UK subsidiary is active in investment banking. Moos
said VTB does not provide a break-down of its financial results.
Moos also said on Tuesday that VTB does not have a substantial
operation in Crimea and does not have plans to develop one.
(Reporting by Megan Davies, additional reporting by Maria
Kiselyova in Moscow and David Milliken in London. Editing by