MOSCOW. April 21 (Reuters) - State-controlled VTB (VTBR.MM: Quote, Profile, Research, Stock Buzz), Russia's second biggest lender, has already restructured 15 percent of its loan portfolio and sees "problem debt" at around the 7 percent mark, its CEO was quoted as saying on Tuesday.
"I think it is 15 percent (the share of the loan portfolio that has been restructured so far). It is no use to milk a cow if there is no milk," Andrei Kostin told Kommersant business daily.
VTB was entrusted by the state to act as clearing house for credit resources for Russia corporates at a time when the global financial crisis has effectively blocked wholesale credit markets.
"VTB during six months of the crisis has increased its loan portfolio by 50 percent," Kostin said.
Analysts questioned the economic wisdom of VTB aggressively expanding its loan book, given the difficult environment for Russian corporates, as souring assets are likely to spill over into hefty losses.
"I am always ready to give loans once my departments tell me this is an awesome loan with a return, an entry, an exit and everything works out," Kostin said.
VTB is expected to show a net loss of $316.7 million in the fourth quarter of 2008 as provisions on bad loans soar as the economy shrinks, forcing the state bank into the red. [ID:nLH692798]
The bank went public in May 2007 in an $8 billion IPO and its shares have lost around 75 percent of their initial price so far bringing losses and angering thousands of Russians who had believed in a high-level promoted "people IPO".
VTB is considering compensation to those individual investors who had bought its shares during the placement but no concrete solution has so far been proposed.
"The core principle should be the same as for Deposit Insurance System. It means there is a minimal amount (as a base to calculate the compensation) which should be the same as for small as for big investors," Kostin said. (Reporting by Dmitry Sergeyev; editing by Mike Nesbit)
VTB’s Non-Performing Loans Share Rises to 3.4%, Kommersant Says
April 21 (Bloomberg) -- VTB Group Chief Executive Officer Andrei Kostin said the share of non-performing loans held by Russia’s second-biggest bank almost doubled in the first quarter, Kommersant reported.
The share of non-performing loans jumped to 3.4 percent on April 1 from 1.8 percent on Jan. 1, the Russian newspaper cited Kostin as saying in an interview. State-controlled VTB already considers about 7 percent of its portfolio as “problem” loans and that figure will probably rise this year, Kostin said, according to Kommersant.
To contact the reporter on this story: Denis Maternovskyin Moscow at firstname.lastname@example.org
Last Updated: April 21, 2009 02:23 EDT
VEB may attract financing to purchase stake in Rostelecom from KIT Finance
April 20, 2009
Vnesheconombank (VEB) may attract credit financing from the Deposit Insurance Agency to purchase 40% in Rostelecom from KIT Finance, Kommersant reports citing unnamed sources in banking industry. The amount of the loan could reportedly reach R70bn ($2.1bn).
The news confirms previous reports that VEB is likely to accumulate a minority stake in Rostelecom. Although the reported price is 27% below the company's market capitalization (approximately $7.2bn on MICEX as of Friday's close), it is several times above our fair value estimate of $1.1bn. Given the high probability of Rostelecom being the center of the consolidation of Svyazinvest's assets, the valuation would still imply strong swap risks for regional telecoms' minorities.
Sistema eyes majority stake in telecom Svyazinvest
MOSCOW, April 21 (Reuters) - Russian conglomerate Sistema (SSAq.L: Quote, Profile, Research, Stock Buzz) has ambitions to bid for control of Svyazinvest after a getting a lower-than-expected valuation on the 25 percent plus one share in the telecoms giant it wanted to sell to the state.
Sistema proposed in October that the government buy back its quarter share in Svyazinvest for $1.9 billion. Sources said last week the stake, which is held by Sistema's unit Comstar (CMSTq.L: Quote, Profile, Research, Stock Buzz), had been valued at about $668 million. [nLH393485]
"Comstar is going to file a proposal to the government to buy another 25 percent of Svyazinvest based on a valuation made by Ernst & Young," Sistema's spokeswoman Yulia Belous said on Tuesday.
"In our opinion, this valuation was made based on very conservative forecasts for Svyazinvest's development. We believe that we can present ourselves to the state as a more efficient manager (of Svyazinvest)."
Yelena Lashkina, a spokeswoman for the Communications Ministry, said the government had no intention of selling its Svyazinvest shares.
Yekaterina Nevskaya, a spokeswoman for Comstar, said Comstar would be interested in increasing its Svyazinvest stake to a controlling one "at an attractive price."
The government is currently mapping out another restructuring plan for Svyazinvest, whose privatisation has been delayed by nearly a decade.
Analysts believe the government is likely to negotiate for a non-cash swap of the Svyazinvest stake held by Comstar for Svyazinvest's shares in Moscow fixed-line network MGTS (MGTS.RTS: Quote, Profile, Research, Stock Buzz), which is already majority-held by Sistema.
They have also said that Comstar's 26 billion-rouble ($777 million) loan from Sberbank (SBER03.MM: Quote, Profile, Research, Stock Buzz) would likely figure in the deal.
(Reporting by Anastasia Teterevleva; writing by Maria Kiselyova; editing by John Stonestreet)