VTB not planning share buyback from 'unfriendly' non-residents, as any buyback reduces capital - Pyanov

MOSCOW. Oct 10 (Interfax) - VTB does not plan to buy back shares from so-called unfriendly non-residents as part of the latest Russian presidential order, and presidential permission was required to reorganize the bank, VTB First Deputy Management Board Chairman and CFO Dmitry Pyanov told reporters.

"There are no such intentions. Any buyback of shares, even from 'unfriendly' persons, would be a reduction of our capital. Therefore, we have no such intentions to conduct any buyback, buyout, [and/or] any operations other than reorganization regarding our shares," Pyanov said.

Pyanov emphasized that the bank does not need to buy back shares "from some minority shareholders, unfriendly holders" in order to reorganize.

Banks worldwide very rarely buy back shares, even public banks, because "a buyback destroys the most valuable regulatory base capital" that the main standards form, Pyanov said.

"I do not know of a single banking organization that of sound mind would pursue some kind of buyback in the current situation, when the standards are both growing as planned, restoring the Basel surcharges, and growing unplanned through the countercyclical surcharge; and macro-prudence seems to be pressuring predominantly retail business for all loan products," Pyanov said.