VTB, DIA ink agreement on supporting Bank of Moscow
MOSCOW. July 20 (Interfax) - VTB and two of its subsidiaries, the Deposit Insurance Agency (DIA) and Bank of Moscow , have signed an agreement on the provision of support to Bank of Moscow, a joint VTB-DIA statement says.
The agreement was also signed by VTB Debt Center and VTB Pension Administrator.
The document sets out the rules and conditions for mutual efforts in carrying out a financial-rejuvenation plan for Bank of Moscow.
VTB Debt Center and VTB Pension Administrator are the investors for the effort. They will be responsible for boosting Bank of Moscow's capital, as well as working out a detailed plan for its financial bailout, the statement said.
The DIA will provide financial assistance to Bank of Moscow after the investors consolidate enough shares in the bank that would a lot them to settle issues through shareholder meetings.
The Central Bank of Russia and DIA agreed on a plan to bail out Bank of Moscow on June 30. According to this plan, the DIA will provide the bank with a guaranteed loan worth 295 billion rubles. VTB Group will earmark 100 billion rubles for Bank of Moscow's capital.
The implementation of the bailout plan will start with VTB's consolidation of 75% in Bank of Moscow. VTB plans to consolidate this stake by the end of the third quarter, the banking group's deputy CEO Herbert Moss said. The bank already has several agreements with shareholders, VTB chief Andrei Kostin said prior to this.
Moos said earlier this week that VTB plans to spend around 258 billion rubles for 100% in Bank of Moscow including expenditures for its additional capitalization.
VTB purchased 46.48% in Bank of Moscow from the city's government in February 2011 and a blocking packet in Capital Insurance Group for 103 billion rubles. Capital Insurance Group owns 17% in Bank of Moscow.
Bank of Moscow was sixth biggest bank in Russia by assets at the end of the first quarter of 2011 according to the Interfax-100 ranking, compiled by the Interfax Center for Economic Analysis. VTB was second leading bank in the ranking.
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