Russian President Vladimir Putin decreed on May 17 that the state-controlled bank Vnesheconombank (VEB), servicing Russia's external debt and providing support for intergovernmental agreements, be enlarged into a state corporation by incorporating Roseximbank and the Russian Development Bank.
Andrei Kostin, CEO of Russia's second-largest bank, said on Saturday that, "A fundamental decision [on selling a stake in the EADS] has been made. The stake could eventually be transferred on to the United Aircraft Building Corporation, but is likely to be initially sold to VEB."
The banker added that there was "a more than 50%" chance that the deal would be closed this year.
Kostin said the procedure was aimed at bypassing administrative barriers to a direct transfer of the stake, which he said would cost anything "from the market price and higher."
VTB bought a stake in EADS for around 1 billion euros in the summer of 2006.
Kostin also confirmed VTB's plans to take out loans worth 17.3 billion rubles ($705 million) from the Central Bank before this year's end.
The banker said that the VTB Group had obtained a license to open a subsidiary bank in India that could become operational next February, and also confirmed plans to open an outlet in China later this year and to complete the process of incorporating the group's European banks into VTB Austria.
VTB Bank is the lead bank for VTB Group, comprising VTB 24 retail banks, and outlets in Ukraine, Belarus, Armenia, Georgia, Britain, Germany, France, Austria and Angola. The bank's other subsidiaries are Russische Kommerzial Bank AG, Russian Commercial Bank (Cyprus) Ltd., and Vietnam-Russia Joint Venture Bank.
Kostin went on to say that his bank had received the Central Bank's approval for the purchase of Capital Bank in Uzbekistan: "We are in the process of submitting documents to local regulating bodies."
The VTB Group plans to finalize all technicalities for the transfer of a stake in Alrosa [RTS: ALRS], Russia's largest diamond producer, and possibly close the deal this year.
"We are planning to discuss all the technicalities later this year..., it is possible that the deal could be closed before late December," Kostin said.
Alrosa accounts for 97% of Russian and 25% of global diamond output. It is 37% owned by the Russian government, the Yakutian government owns a 32% stake, the company's employees 23% and the remaining 8% is held by eight districts in Yakutia.
Last year Alrosa's sales exceeded $3 billion.
On plans for 2008, Kostin said the VTB Group would open a subsidiary leasing company in Armenia to lease out equipment to Armenian Copper Program (ACP), a mining enterprise whose subsidiary, Teghut, is to take out a $257 million loan from VTB to develop the Teghut copper and molybdenum deposit and build a ore-dressing plant in the former Soviet republic.
VTB is Russia's second-largest bank for assets and owner equity, and 77.5% government controlled. The bank floated 22.5% of its authorized capital at an IPO in May.
