MOSCOW (Reuters) - Russian authorities are considering transferring a stake owned by state-controlled Otkritie bank in the country’s second largest lender, VTB (VTBR.MM), to state development bank VEB, three sources familiar with the discussions told Reuters.
The deal, if it went ahead, would fit in with a broader move in Russia’s banking sector and economy, where once privately-held assets are being transferred to state entities that are taking on a more powerful role in the economy.
The 15 percent stake which could be transferred is worth around $1.5 billion at current market prices. Otkritie bank is a former private lender which was bailed out by the central bank last year. The Russian government holds a further 61 percent stake in VTB. The rest of the shares are traded on the market.
VEB, headed by former first deputy prime minister Igor Shuvalov since May, is set to be recapitalized to serve as one of the key vehicles for President Vladimir Putin’s new investment drive after his re-election this year.
VEB also needs the fresh capital after running into problems with past investments dating back to the Sochi 2014 Olympics.
In May, Putin ordered at least 8 trillion roubles worth($128.4 billion) of state spending on infrastructure, education and healthcare over the next six years.
To find at least some of that money, the government has proposed to increase value-added-tax, the retirement age and raise more debt.
VEB’s Shuvalov said in May the size of the future capital injection would have to be decided by the finance ministry.
A source familiar with the matter said one of the options being considered to bolster VEB’s finances was a transfer to the bank of Otkritie’s 15 percent stake in VTB, which Otkritie got when it was still a private commercial lender.
This was confirmed by two other sources - a state banker and a high-ranked official.
The central bank, which owns Otkritie, and VEB did not reply to Reuters’ requests for comment. Otkritie bank said it was not currently discussing such an idea. The finance ministry declined to comment.
The sources said no final decision had been taken.
Anton Lopatin, an analyst with Fitch ratings agency in Moscow, said assets such as real estate or equity stakes could be used to boost a bank’s capital.
“There have already been such examples in Russia in the past,” Lopatin said.
“But there is a risk that the value of the assets can go down, so the capital injection can end up being lower than planned. The conventional way to boost a firm’s capital - issuing new shares - is more solid in our view.”
Writing by Katya Golubkova; Editing by Alexandra Hudson