VTB Lures Foreign Investors to Russia
Yesterday, Vneshtorgbank (VTB) President Andrey Kostin and Citigroup top managers talked over the chances of cooperation expansion. Citigroup is tipped as the most probable underwriter for the first IPO planned by VTB for 2006. Moreover, the Russian Bank intends to attract Citigroup to its retail subsidiary established based on the Guta Bank's assets.
As of April 1, 2005, VTB was the second in Russia in net assets (442.4 billion rubles) and in equity (74.1 billion rubles). The government’s stake equals 99.9 percent.
In New York, Andrey Kostin met Citigroup Chief Executive Officer Charles Prince and Citigroup Chairman Sanford I. Weill. Sources with the VTB press service told Kommersant the talks focused on the chances of cooperation expansion. But according to Bloomberg (with due reference to Kostin), the parties intended to discuss selling from 10 percent to 20 percent in VTB through IPO, so that the Russian bank could raise up to $2 billion in 2006.
Sources with VTB explained to Kommersant Kostin had obviously meant the overall borrowing of the bank. “As to IPO, it is too early to speak of it, as the parameters have not been determined yet. Besides, the bank’s owner – the RF government – has not taken the principal decision on the issue,” the sources pointed out.
Citigroup and Deutsche Bank are the most probable underwrites for the future IPO, in addition, they might be interested in acquiring some stocks of VTB through the public offering, thought until very recently Citigroup has never been named amid potential buyers of the VTB stocks.
On the other hand, Andrey Kostin might be endeavoring to lure foreign investors to retail subsidiary of VTB set up based on Guta Bank, where VTB bought out 85.8 percent last summer. Guta Bank, which was registered on July 1 as Vneshtorgbank Retail Services, starts operating under the Vneshtorgbank 24 brand on August 1.
In the VTB, they don’t expect Kostin’s tour to New York to result in the definite agreement under the project, but look for some other potential investors, including Deutsche Bank, which, apropos, was eyeing the VTB stocks last year. Kostin himself acknowledged VTB held talks with Deutsche Bank. Therefore, the German bank may get interested in the retail subsidiary of VTB.
www.kommersant.com
All the Article in Russian as of July 13, 2005
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