VTB raises another 200 bln rubles in subordinated debt from NFW, this will help bank through dividend payout period - first deputy CEO

MOSCOW. July 31 (Interfax) - VTB has received a 200 billion ruble subordinated deposit from the National Wealth Fund (NWF) as capital for the ethane-rich gas processing complex construction project in Ust-Luga (Leningrad region), VTB First Deputy CEO Dmitry Pyanov told reporters.

"We managed to receive 200 billion rubles of new subordinated debt for Ust-Luga before the balance sheet reformation date, which contributed 0.8 percentage points to capital adequacy and helped us pass the reformation date while recognizing the 276 billion rubles in dividend payouts via the accrual method," Pyanov said.

According to Central Bank of Russia's regulations, during a certain period after the annual general shareholders' meeting, the issuer must reclassify accrued dividends from capital to dividend liabilities before payment, he said. "This balance sheet reformation takes place on July 24 in our case," he said.

The dividend payout is split into two tranches: one (slightly over 50 billion rubles) has already been distributed among shareholders behind nominee holders, while the second (over 220 billion rubles) will be transferred in mid-August to direct shareholders and the government. "Nevertheless, the 276 billion rubles already have an effect [capital adequacy] in July," he said.

VTB's capital as of July 1, 2025, stood at 2.593 trillion rubles. It is expected to decrease to 2.449 trillion rubles by August 1. The capital's July dynamics will be positively impacted by the 200 billion rubles in subordinated funding from the NWF (+0.8 percentage points to capital adequacy), and negatively impacted by the 276 billion rubles in dividend payouts (-1.1 p.p.) and other events totaling 68 billion rubles (-0.3 p.p., deferred tax asset effect on capital).

Capital is projected to rise to 2.584 trillion rubles by October 1 due to a 90 billion ruble additional share issue (+0.4 p.p.) and other changes amounting to 45 billion rubles (+0.2 p.p., audited profits).

"In September, we expect the additional share issue to be registered - by September 30. We anticipate the issue will be between 80 and 90 billion rubles. We don't know the exact amount because we cannot influence the volume of pre-emptive rights or market demand. In the 2023 issuance, these were minimal. We understand that part of the dividends paid out may be used to participate in the share offering through pre-emptive rights. So we've defined the upper boundary at 90 billion rubles for the offering," he said.

He recalled that the bank had been accumulating capital adequacy in advance through audited profits and subordinated debt from the NWF for the Moscow-St. Petersburg high-speed rail project totaling 93 billion rubles.

VTB expects the total capital adequacy ratio N20.0 to decline from 10.2% on July 1 to 9.6% on August 1, then rise to 10.0% by October 1. The core capital adequacy ratio N1.1 is expected to drop from 6.7% on July 1 to 5.8% on August 1, and then grow to 6.0% by October 1. The regulatory requirements, including the dividend payout, will be met with a buffer above the minimum levels, Pyanov said. "VTB Group's Aristotelian drama of 2025 is its ability to pay such large dividends without breaching capital adequacy or triggering asset thresholds that require subordinated debt to be written off. That's our main concern," he said.

"In essence, this [the measures to restore capital adequacy] is our 2025 trick," he said. "If you look at it with a summer analogy - it's like skillfully skipping a flat stone across water and getting as many bounces as possible. You need to calculate the right angle. There's a magic angle for that throw. Scientists believe it's about 20 degrees. For us, the magic angle of this throw is the accumulated capital adequacy before the balance sheet reformation," he said.

VTB maintains its forecast for the total capital adequacy ratio N20.0 at 9.5% by the end of 2025.