Three in a boat

VTB wants to discuss its own IPO with Sberbank and the Ministry of Finance

Yesterday the Ministry of Economic Development was supposed to submit a concept for the development of Vneshtorgbank to the government for consideration. The head of Vneshtorgbank Andrey Kostin spoke about this yesterday. It was previously reported that the government at a meeting on December 7 may consider the issue of VTB's IPO. The bank planned to list up to 25% of its shares on the stock exchanges during the IPO. As is known, VTB has long been seeking approval of the bank’s development concept, which would allow the bank to be removed from the list of strategic enterprises. For quite a long time, the state bank was unable to obtain the decision from the authorities it needed, but, as Mr. Kostin said yesterday, “it (the document - Ed. ) has already been endorsed by all the top officials.” In this case, it will finally become possible to conduct an initial public offering of the bank’s shares, which the management of the credit institution has been talking about for several years now. Vneshtorgbank needs to enter the public market primarily in order to increase capital, because the bank’s current own funds are not enough to develop its business.

Mr. Kostin also spoke about what measures the bank intends to take in preparation for the IPO after its exclusion from the list of strategic enterprises. VTB is going to attract an independent director to the board of directors of the credit organization so that it becomes possible to include the bank's shares in the exchange quotation list "B". “I think this will be a fairly well-known international figure,” said Mr. Kostin. In the event that there is only one independent director, then perhaps he will not be a citizen of Russia. Now there are nine directors on the board: six representatives of ministries and departments, one each from the Central Bank and the presidential administration, another chair belongs to Andrei Kostin.

As you know, VTB is not the only large bank that wants to attract investors from the open market. Sberbank announced its plans to conduct an additional issue in the first quarter of 2007. Observers believe that the bank that manages to enter the market first will have a more successful placement. Yesterday, Andrei Kostin commented on this situation for the first time: “We must get a decision on increasing the capital base and then sit down at the negotiating table with Sberbank, the Central Bank, and the Ministry of Finance. I don’t fully know the nature of Sberbank’s issue, how and where it will be placed, but, according to my information, in Russia.” VTB's geography is much wider - Andrei Kostin previously said that the IPO will take place not only on Russian stock exchanges, but also on London and one of the Asian trading floors. At the same time, the entry of both Sberbank and VTB into the stock exchange affects the same groups of investors, so coordination in this matter is necessary. “But I am sure that we will reach a compromise,” Mr. Kostin believes. According to him, the bank's IPO is planned for May next year. It was previously reported that Sberbank will conduct an additional issue of its shares in the first quarter of 2007.

The reaction to these words was consistently immediate from Finance Minister Alexei Kudrin. “There is no need to worry, we will ensure terms that are beneficial to both banks, I think that everything will be within the pre-agreed time frame,” he said, emphasizing that everything will happen according to plan. The minister recalled that the state has a controlling stake in both banks and that there are no questions regarding the timing of the placement of their shares.

The head of Sberbank Andrey Kazmin has not yet officially voiced his position on this matter.

For the sake of the IPO of the bank, VTB is ready to postpone the merger of Promstroibank. “Today, our priority is an IPO, so if we need to delay the process of integrating Promstroy, VTB will do it,” said Mr. Kostin. Earlier, Vice President of Vneshtorgbank Nikolai Tsekhomsky said that since the issuer provides consolidated statements for the IPO of the entire VTB banking group, it does not matter at all whether Promstroibank will be merged at that time.

Natalia ROMANOVA