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Sep. 08, 2005
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VTB to Buy Out Foreign Banks for the Budget Account
Vneshtorgbank (VTB) President Andrey Kostin announced September 7, 2005, the bank would increase stock capital by 37.5 billion rubles for the budget funds account. The increase will enable VTB to buy out from the Central Bank (CBR) the stocks of Russian foreign banks.
Now, the 99.9 percent state-run Vneshtorgbank has 42.7 billion rubles in stock capital. VTB owns 100 percent in Russische Kommerzial Bank AG (Switzerland) and in Russian Commercial Bank (Cyprus). It is also the owner of 85 percent in Viennas Donau Bank and of more than 30 percent in East-West United Bank (Luxemburg) and Ost-West Handelsbank (Frankfurt am Main). Central Bank of Russia holds 88.89 percent in Moscow Narodny Bank (London), 87.03 percent in BCEN-Eurobank (Paris), 51.62 percent in Ost-West Handelsbank, as well as 15 percent in Donau Bank and in East-West United Bank.

VTB President Andrey Kostin announced yesterday the bank intends to increase stock capital by 37.5 billion rubles for the budget funds account before late this year by releasing new stocks. The increased stock capital will allow the bank to buy out the stocks of Russian foreign banks from CBR.

So far, neither VTB no Finance Ministry of Russia have ever made any public statements concerning the budget funding of the deal. Moreover, Finance Minister Alexey Kudrin put forward another scenario a month ago, whereby CBR would get a stake in Vneshtorgbank in exchange for its stocks of Russian foreign banks. Afterwards, the CBRs stake in VTB would be made private, Kudrin said then. Now, however, it seems the Cabinet has turned off that scenario.

Finance Ministry declined to comment yesterday. A source with the government told Kommersant that using the budget money to acquire new stocks of VTB had been canvassed from the very beginning.

All the Article in Russian as of Sep. 08, 2005

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