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Only VTB earns money by using VTB

Expert

The VTB bank has closed a deal where it sold 24 per cent of the shares of an additional emission. The shares were offered to investors at a 10-per cent discount as compared to the exchange price, which fact attracted a broad range of participants even in spite of the fact that the shares were traded exclusively on the Moscow Stock Exchange.

Active purchases were also stimulated by the bank’s sale of shares in its capital at extremely low coefficients. Thus, the capitalisation to the bank’s own capital ratio (p/bv) amounted to 0.62, whereas in VTB’s principal rival – Sberbank – it is 1.25 (you may say that investors value Sberbank 100 per cent higher than they do VTB).

VTB has managed to attract as anchor investors as many as three sovereign funds: those of Norway, Qatar and Azerbaijan. “They, in fact, have bought more than half of the shares,” VTB head Andrei Kostin said about the deal. As a result, while foreign states acquire VTB stock, the share of the Russian Federation has dropped from 75.5 to 60.9 per cent.

This is already the third public deal of the VTB to attract capital. The first one was the legendary 2007 IPO, when the bank sold 22.5 per cent of its shares on the open market at 13.6 kopecks apiece. The VTB successfully used the market situation then and earned 205.7 billion roubles, including from 114,000 individuals. However, less than two year later, a crisis struck. The bank urgently need additional capitalisation, and the state came to its rescue in 2009. The VTB increased its authorised stock by 55 per cent then having received 180 billion roubles from the national purse. The shares then were sold at 4.82 kopecks – three times cheaper than at the popular IPO.

When individual shareholders who had bought their shares at the IPO expressed their discontent, the VTB offered them in the spring of 2012 to buy back their shares at the original price. However, in the five years that had passed, inflation had devalued their investment by some 50 per cent.

Now this is the third emission. This time the VTB has managed to attract 102.5 billion roubles, which formed additional capital, while the sale price amounted to 4.1 kopecks per share. Thus, in just six years the bank has attracted from shareholders 487.7 billion roubles. VTB’s capitalisation at the price of the latest SPO is 531.1 billion roubles. It turns out that funds attracted from investors form 92 per cent of VTB’s capitalisation.