28 Dec 2023 20:04

VTB considering reverse stock split for convenience of shareholders, but no solution for it yet - IR

MOSCOW. Dec 28 (Interfax) - VTB is looking at possible consolidating (reverse split) shares for the convenience of its shareholders, but there are no solutions for it yet, Leonid Vakeev, VP, Head of the bank's Investor Relations department said.

VTB shares have a historically small par value - 1 kopeck; the bank's charter capital consists of almost 27 trillion securities.

"Still, this is a wish we have often heard over the years, that a small nominal value and, accordingly, a large number of shares is inconvenient and unusual. We know about this opinion, about this problem," Vakeev said on the Dialogue between VTB and Retail Investors podcast.

He said that VTB, whose shares were traded on the London Stock Exchange, was under sectoral sanctions for a long time and could not attract new capital. "If we had done a reverse split, that is, an enlargement of the par value of shares, this would have led to trading being stopped, as we had a listing in London and international investors. This would be perceived from a formal point of view as an issue of new capital, and would fall under those sanctions," Vakeev said.

"Then, when we got into the SDN list, this consideration disappeared. Of course, for the last 1.5-2 years this was not, perhaps, a focus. First, there was 2022, when we just had to think about how to urgently rebuild everything in these new conditions and then live in the new conditions. This year we did two additional issues, and it was also difficult to mix it with something else. We are aware of this issue, and this is our focus. We do not have any solutions yet, that is, I can't say we will definitely do a reverse split at some point, but this is one of the things we are thinking about," he said.

The issue of increasing the par value of VTB shares was raised in 2019 at the annual shareholders meeting. Then the bank's CEO, Andrei Kostin, admitted that the small nominal value of the shares was not very convenient to work with, and allowed for the possibility of increasing the nominal value of the shares.

A reverse split would not become a significant factor in terms of the valuation of VTB shares, Vakeev said. "If it gives shareholders added convenience or alleviates some inconvenience for some, that would certainly be a positive issue," he said.