A few weeks ago I said how surprised I was at the suggestion that VTB would require any state aid because of its acquisition of a stake in Bank of Moscow. Now I am, like everyone else, shocked at the size of the $14 billion bailout that the Central Bank has just announced.
I would remind you that, during my management, Bank of Moscow was, from 2007, one of only a handful of banks in Russia with an investment grade rating and hand leading international banks such as Goldman Sachs, JP MorganChase and Credit Suisse among its shareholders.
My statement issued earlier this week said that numerous facts in the hostile takeover of Bank of Moscow by VTB lead to the conclusion that the principle motivation behind the change of control of Bank of Moscow was political. This latest announcement by the Central Bank that it will provide financial aid to VTB to help deal with alleged and non disclosed problem loans at Bank of Moscow only further supports this conclusion.